ORAL ANSWERS TO QUESTIONS

EDUCATION

The Secretary of State was asked—

Children in Care

Nadine Dorries: What progress his Department has made on steps to improve the protection of children in care from sexual exploitation.

Tim Loughton: Let me welcome you, Mr Speaker, back from the recess—without a tan. In July I published a report describing extensive progress on implementing last November’s “Tackling Child Sexual Exploitation” action plan. Although all children are potentially at risk, particular challenges arise for children in care, especially those in children’s homes. Accordingly, I announced urgent action to improve children’s residential care, including developing a clearer understanding of when children go missing, allowing Ofsted to share the locations of children’s homes with the police and examining out-of-authority placements.

Nadine Dorries: I am sure that the Minister is aware that 45% of children who are in care and looked after are in homes away from their borough. They are removed from their networks of support and the familiarity of adults whom they can trust, which makes them more vulnerable and more prone to abuse. Does he agree with the report by the deputy Children’s Commissioner that children should be cared for as close to home as possible, and, if so, what steps are we taking to ensure that happens?

Tim Loughton: I entirely agree with my hon. Friend on that point. That is why I launched the progress report jointly with the deputy Children’s Commissioner, picking up what I believe to be the scandal of too many vulnerable children—almost half, as my hon. Friend said—being placed a long way from familiar environments. We have set up a task and finish group specifically to look at the problem and at how we can keep children closer to home and familiar environments when that is in their interests. The group will report back to me within the next few weeks and we will take specific action as a result.

Ann Coffey: May I thank the Minister for including me, as chair of the all-party group on runaway and missing children and adults, on the working group on children’s homes? If we are to safeguard children in care from sexual exploitation, we need to improve the quality of care in some of our children’s homes. Does he agree that we need to move to more robust inspections that measure outcomes for children in terms of improving their well-being and safety?

Tim Loughton: The hon. Lady is entirely right and I thank her for her work with the working group. I should also mention that she joined me at the joint press conference to give the useful and detailed findings of her report. The third task and finish group we set up—into which I very much hope she will have some input—is looking at the quality of residential children’s homes and the quality of the work force working in them, where I think we can do an awful lot better.
	Inspection needs to be better and more appropriate, and we need to ensure that any authority placing a child in a home is absolutely convinced that the quality of care is appropriate and the best available.

Rehman Chishti: On the protection of children, the Minister will be aware of the recent murder of Shafilea Ahmed and the link to honour violence. What steps are being taken in schools to help to tackle such horrific acts of violence?

Tim Loughton: My hon. Friend mentions a particularly horrific case that shocked the whole nation when it appeared in our headlines. It is very important that we raise the profile of this insidious force—which I am afraid is present in too many communities—and ensure a joined-up approach, involving the Home Office, police, local authorities and our schools, so that this is not happening beneath the radar and so that children are educated and know what to do to avoid such tragedies happening again.

Lisa Nandy: Although Ministers are right to focus attention on the sexual exploitation of children in care, such children continue to face many challenges in their lives. Today’s report by the all-party group on looked-after children and care leavers reveals that, shockingly, only 12% of children in care get five good GCSEs, despite efforts by two successive Governments to change that. Will he tell us why the important strategy on children in care, which was promised to us for this summer, has been delayed?

Tim Loughton: I thank the hon. Lady for her question, but she has failed to notice the fact that throughout the last year the Department for Education has announced a series of practical measures to help children in care in all sorts of destinations, to tackle the very scandal that her Government left of the huge gap of achievement in education between children in care through no fault of their own and their peer group. That is why, for example, every child in the care system automatically qualifies for the pupil premium. That is real, practical, tangible action, which her Government never took for those kids who need it most, and there are many more things still to come over the next few weeks and months.

Dan Rogerson: Further to the Minister’s answer on reducing the number of out-of-area placements, will the Government do more to ensure that information is adequately shared between police forces and those who inspect homes and local authority departments, to ensure that any problems can be addressed?

Tim Loughton: My hon. Friend gives me the opportunity to shout “House”; that is the full set. We have set up three task and finish groups, and the third is looking specifically at the anomaly left over from regulations in the Care Standards Act 2000, whereby the police are unable to access information about children in children’s homes who go missing or get into trouble, in order to co-ordinate the action that needs to be taken to prevent those children from ending up in the hands of sexual predators and others. That situation will be changed. The group will report its findings to me in the next few weeks, and urgent action will be taken as a result of them.

Adoption

Jeremy Lefroy: What progress his Department has made on steps to speed up the adoption process.

Charlie Elphicke: What progress his Department has made on steps to speed up the adoption process.

Michael Gove: In May, my Department published scorecards for local authorities to enable them to identify and tackle the causes of delay in the adoption system. My Department will shortly launch a consultation on changes to speed up processes for prospective adopters, and we plan to introduce legislation thereafter.

Jeremy Lefroy: I thank the Secretary of State for his answer. Will he confirm that he is looking at all the barriers to adoption that prospective parents can encounter—including, on occasions, their religious faith?

Michael Gove: My hon. Friend is quite right to raise that issue. There have been a number of occasions in the past when, for the best of motives, social workers have felt it inappropriate to match children with prospective adopters because faith might have been seen as a barrier. I do not believe that faith should be a barrier to ensuring that children find a loving home.

Charlie Elphicke: We know that some 5,000 children have placement orders, but the number of approved parents is less than a third of that figure. Does not this highlight the importance of hammering home to social services authorities the need to welcome prospective adopters and push the process through so that they can adopt children today?

Michael Gove: I absolutely agree. One of the most heartbreaking aspects of my job is reading about parents who want to adopt children but who have found that, for understandable reasons, the system has been far too bureaucratic and slow in allocating children to them. Working with the best in local authorities, I am sure that we can all do better.

Valerie Vaz: It is welcome that the speed of adoption is being looked at, but will the Secretary of State confirm that the safeguards of the Hague convention will still apply to inter-country adoptions, and that the adoption panels’ functions will not be watered down?

Michael Gove: It is vital that we ensure that international safeguards are present in respect of inter-country adoptions. When we come to look at the adoption panels, we will want to strike a balance to ensure that the right people are coming forward and being scrutinised appropriately with the minimum of delay.

David Simpson: What more can the Government do to encourage and help older couples who wish to adopt children?

Michael Gove: We can do that by making it clear to all local authorities that age should not be a barrier. I understand the pressures on social workers, and I empathise with them, but in the past local authorities have sometimes made the best the enemy of the good. Notwithstanding the fantastic work that is done in children’s homes and by foster carers, we know that adoption is for good, and that the sooner we can place a child permanently in a loving home, the better it is for all concerned.

Jo Swinson: One of my constituents, who is here today, has spoken to me about her continued grief at having been forced to give up her son for adoption in the 1970s. Will the Secretary of State take a moment to read about the experience of my constituent, and give her the recognition that she is seeking of the fact that the forced adoption practices that used to exist in this country were traumatic and absolutely wrong, and should never have been allowed to exist by any Government?

Michael Gove: The hon. Lady makes an effective point in a very effective way, and I absolutely agree with her. It is one of the blessings of the past 30 years that attitudes towards adoption and conception have changed so much, and that the stigma that used to be attached to children who were born out of wedlock is, mercifully, no longer there. It is quite wrong to force a mother to part from her child when she is capable of providing that child with a loving home. Anxious as we are to ensure that children in need are adopted, we must be equally anxious to ensure that single parents are supported.

Child Care

Gerry Sutcliffe: What plans his Department has for child care; and if he will make a statement.

Sarah Teather: The Government have extended free early education to 15 hours a week for all three and four-year-olds, and plan to extend this to around 40% of two-year-olds from September 2014. We recognise, nevertheless, that families might face difficulties with child care costs for older children or those beyond the free entitlement. The Prime Minister and the Deputy Prime Minister have asked the Minister for Disabled People, my hon. Friend the Member for Basingstoke (Maria Miller), and me to lead a commission to look at the affordability of child care, and we will report in the autumn.

Gerry Sutcliffe: First, I hope that we are going to get an apology from Ministers for the way in which they have treated the One in a Million school in Bradford.
	The Minister will be aware of the Daycare Trust’s survey that came out during the summer, which showed an 18% increase over 12 months in the cost of a week’s holiday child care. What are Ministers going to do to support hard-working families and parents who are struggling to meet unaffordable child care costs?

Sarah Teather: This Government are investing more in early years education than any previous Government: £760 million is being invested to extend the free entitlement down to disadvantaged two-year-olds. As I said in
	answer to the hon. Gentleman’s initial question, we have set up a commission to look at these issues, especially those relating to wrap-around care and holiday care, which we know to be particular issues for many parents.

Annette Brooke: What more can the Minister do to give better support to children with disabilities, including speech and language difficulties, through child care and in early learning centres?

Sarah Teather: I agree that this is a particular issue. My hon. Friend may be aware that today we published the draft provisions for special educational needs, which we hope will go into the Bill next year. We are particularly looking at extending down the support and protection offered for children in the school system so that nought to fives get similar support. She will also be aware that in the specific guidance to local authorities we highlighted the issue of making sure that they should provide more information for parents who have a disabled child.

Sharon Hodgson: As the Minister said, she has today published the draft legislation on the provision for children with special educational needs and disability, so how does she intend to address the shocking fact that 87% of local authorities reported that they do not have enough holiday child care for children with SEND?

Sarah Teather: I think there is a particular issue to address on the availability of holiday care for many children, not just for disabled children, and the commission is looking at holiday provision. Similarly, we are trying to encourage local authorities to put in place a local offer as part of the draft provisions we published today. That will include making sure that adequate respite care is available, and holiday provision is a prime example of that.

Duncan Hames: I am very glad that my hon. Friend is looking into holiday provision of child care, as many parents who use child minders outside term time find that they need to pay them a retainer—sometimes as much as £1,000 a year—to keep them when they start using the free entitlement during term time. What can be done to help ensure that such families get the full benefit of the free entitlement?

Sarah Teather: This issue about paying a retainer to child minders is, again, symptomatic of the difficulty some families face in some areas in accessing holiday child care, and it is precisely why the commission is looking at this issue.

NEETs

Adrian Bailey: What steps his Department is taking to reduce the number of young people who are not in education, employment or training.

Chris Williamson: What steps his Department is taking to reduce the number of young people who are not in education, employment or training.

John Hayes: I should like to answer Questions 5 and 21 together, Mr Speaker, as they are identical, but I seek your permission to do so.

Mr Speaker: There was no request in advance for that, but my natural leniency may assert itself.

John Hayes: Your benevolence, Mr Speaker, is exceeded only by your sagacity.

Mr Speaker: I agree with that, too.

John Hayes: The proportion of young people not in education, employment or training has been too high for too long. It is a structural problem, reflecting wider changes in the labour market, which we are determined to tackle. This month sees the start of our £126 million youth contract programme for 16 to 17-year-olds supporting some 55,000 young people who are not currently participating. That is on top of our record spending of £7.5 billion on education and training places for young people.

Adrian Bailey: I thank the Minister for his reply. The latest increase in the number of NEETs seems largely to be a result of the drop in employment in the 16 to 18 age group. Local manufacturers in my area report that they have great difficulty in getting young people to go into manufacturing, but that those who do have successful apprenticeships have normally done work experience. Will he lobby his colleagues to reintroduce compulsory work experience in secondary schools to overcome this problem?

John Hayes: The hon. Gentleman is a champion of apprenticeships, as am I. He will be delighted that there are now a record 104,500 apprenticeships for 16 to 18-year-olds, but he is right to say that the engagement of employers is needed, and employers do indeed say that early contact with the world of work is important. He is right to make that case and I share his argument, and we will continue to pursue that course of action.

Several hon. Members: rose —

Mr Speaker: Order. The hon. Member for Derby North (Chris Williamson), who has Question 21 on the Order Paper, is not in the Chamber and is under no obligation to be as he had not been notified of any intended grouping. So no blame attaches to him, but I will call another Member to ask a supplementary.

Jessica Lee: Does my hon. Friend agree that the Erewash jobs fair that I have arranged for this Wednesday is an excellent opportunity to showcase to young people, and indeed to those of all ages, the employment opportunities and opportunities in training and skills that are currently available?

John Hayes: In Erewash, they speak of little else than the hon. Lady’s job fair and her continuing work in the interests of young people and local employers. She is right that through marketing manufacturing opportunities of the kind she mentions we will seed a thirst for such work, which is so vital if people are to fulfil their potential and the economy is to prosper.

Barry Sheerman: May I remind the Minister that there is nothing amusing about the 1 million young people who are unemployed? Is it not a fact that the lack of leadership and imagination in our schools and in the leadership of this country means that those people are languishing with little hope? Can we not use unemployed graduates, working with NEETs, to make something happen and make it happen soon?

John Hayes: The hon. Gentleman is right that this is not a matter for levity, but he is also wise enough to acknowledge, I hope, that it is a structural problem. The number of young people not in education, employment or training began to rise, as he knows, long before the current economic challenges. It requires a structural solution and at the heart of that is building the skills people need to get and to keep jobs, which is precisely what this Government are doing.

Simon Hughes: The Minister has been good at understanding that we need good careers guidance for young people, but if we are to have fewer people out of work and doing nothing at all post-16, high-quality work experience for all young people must be delivered in every school and college. Will colleagues in the Department for Education work with colleagues in the Department for Business, Innovation and Skills to ensure that such a programme is in place very soon?

John Hayes: I am the personification of the relationship between the two Departments to which the right hon. Gentleman refers. It is essential that our strategy for growth and our approach to business work in tandem with what we do in schools. Although he cannot welcome it, as he has already asked his question, I am sure that he will want at least to contemplate the excellent advice to schools on this very subject that I issued just before the summer recess.

GCSEs

Hugh Bayley: What proportion of students at state schools in York achieved five or more GCSEs at (a) grade A* to C and (b) grades A* to E in 2012.

Michael Gove: The Department for Education will publish tables of provisional GCSE results for 2012 in October. In 2011, 84.3% of pupils in state schools in York achieved five or more GCSEs at grade A* to C and 94.3% achieved five or more GCSEs at grade A* to E.

Hugh Bayley: York’s schools continue to perform better than the national average, but I have faced many complaints from parents and teachers about the English marking fiasco. The head teacher of one of York’s best performing schools, Steve Smith, says:
	“It is morally wrong to manipulate exam results in this way—it is playing with young people’s futures.”
	Will the Secretary of State advise Ofqual to re-mark the papers according to the old criteria while the inquiry goes on and will he publish all his correspondence with Ofqual on this matter?

Michael Gove: I am grateful to the hon. Gentleman for asking that question. Let me take this opportunity to underline my admiration for the work done by York schools and York head teachers. I share the sadness that many teachers and students will feel about what happened with GCSE English this year. It is appropriate that we should all learn lessons about some of the mistakes made in introducing an examination, modular in style, that was not best equipped to ensure that all students could perform well and be treated fairly.
	The hon. Gentleman invites me to tell Ofqual what it should do. I will not, because the Secretary of State for Education when the hon. Gentleman supported the Government, Mr Ed Balls, pointed out that Ofqual was an independent regulator of standards, independent of Ministers and reporting directly to Parliament and he said:
	“I am not going to second-guess its work.”—[Official Report, 23 February 2009; Vol. 488, c. 27.]
	I hold to that position.

Mr Speaker: I was reluctant to interrupt the flow of the Secretary of State’s eloquence, but I remind the House that the question relates exclusively to York—not even to Redcar, although Question 9 might present its opportunities to hon. Members.

School Meals

John McDonnell: What plans his Department has for school meals; and if he will make a statement.

Diana Johnson: What plans his Department has for school meals; and if he will make a statement.

Nick Gibb: Our aim is for all pupils to be offered good food in schools and to understand the importance of good nutrition. That is why the Secretary of State has asked the co-founders of the Leon restaurant chain, Henry Dimbleby and John Vincent, to examine school food, determine what more needs to be done to make nutritious and healthy food available to all school children, and ensure that children understand the importance of healthy eating.

John McDonnell: Free school meals are a lifeline to many families living in my constituency and there are concerns that the Chancellor has now called for a further round of expenditure cuts. Will the Minister give an assurance that no category of child eligible for free school meals at the moment will lose their eligibility during the life of this Government?

Nick Gibb: The hon. Gentleman raises an important point. He knows that, to make work pay, we are reforming the benefits system and introducing universal credit. We are working with the Department for Work and Pensions on how that translates into eligibility for free school meals, but we are determined to see no drop in the numbers of parents and their children eligible for free school meals.

Diana Johnson: July’s independent NatCen report on the two-year free school meals pilots in Newham, Durham and Wolverhampton showed a very positive impact on healthy eating, attendance and pupil attainment, just as in Hull when we had free, healthy school meals for
	primary and special school pupils, so why do the Government not now act on the evidence, do something about it and have free school meals in our primary schools?

Nick Gibb: I agree with the hon. Lady about the importance of a healthy school meal to children’s behaviour and their concentration at school. To extend free school meals to the whole population would cost £3.4 billion. The state of the public finances that we inherited from her party’s Government means that we have one of the highest budget deficits in the G20. We have reduced the budget deficit by a quarter in the first two years of this Government, which is a tremendous achievement, but we cannot, however worthy the spending programme, undertake new spending programmes of that order.

Pauline Latham: Is the Secretary of State aware that, according to the School Food Trust’s own survey, almost half of all state secondary schools offer non-permitted foods, and over a quarter offer non-permitted snacks at mid-morning break? Does not that show that it is nonsense to suggest that academies are the only schools not meeting those standards?

Nick Gibb: My hon. Friend makes a good point. The evidence suggests that there have been improvements in maintained schools and in academies, but that more needs to be done in both types of school, which is why we have established the school review under Henry Dimbleby and John Vincent. There have been improvements over the past seven years in the proportion of healthy food taken at lunchtime. More pupils ate a balanced meal in 2010 than in 2004—67% compared to 60%, but that still means that a third of our youngsters are not taking a healthy meal at lunchtime. That is what we seek to address.

James Gray: Does the Minister not agree that if the capable and intelligent people who have been given the opportunity to run their schools under academy status, and also free schools, are able to decide complex things such as finance and how the school is run from top to bottom, it is only reasonable that they should be given the opportunity to decide the nutritional value of school dinners?

Nick Gibb: My hon. Friend makes a good point. The Government’s direction of travel is to give the professionals who run our schools more autonomy to run their schools as they see best. If regulation were the answer to all our country’s problems, every child would be a fluent reader and know their multiplication tables, and every local authority school would be in full compliance with the school nutrition regulations.

GCSEs

Emma Reynolds: What plans he has for the future of GCSEs; and if he will make a statement.

Michael Gove: The coalition Government will shortly announce their proposals for the future of exams at 16; we hope to ensure that future examinations work in the interests
	of all young people. We need exams that will keep pace with the best in the world and meet the demands of children, teachers and employers.

Emma Reynolds: Today is the start of the new school year. Thousands of 16-year-olds in my constituency and across the country have had their hopes dashed and their plans devastated by this summer’s grading fiasco. When will the Secretary of State accept that it is his responsibility to tackle this injustice, and call for a regrading?

Michael Gove: I quite agree that it is appropriate that we should tackle the problem, which arises from the structure of the GCSE examination. That is why we are removing modules and reforming examinations. For years, under Labour, Ministers sat idly by as we endured grade inflation and dumbing down. At last the tide is turning.

Graham Stuart: Does the Secretary of State agree that the challenges in setting the grade boundaries in the new GCSE English qualification this year highlight the need to end modular exams, restrict controlled assessment, and end the lazy devaluation of the GCSE currency that has gone on for too long?

Michael Gove: The Chairman of the Select Committee makes the point superbly.

Stephen Twigg: Over the past 10 days, there have been countless examples of people getting a D for work assessed this summer that would have got a C grade in January. Sally Coates, head of the excellent Burlington Danes academy, who spoke alongside the Secretary of State at last year’s Conservative party conference, said:
	“It is blatantly unfair to move the goalposts, without warning, midway through the year”,
	and described it as “rough justice.” Does the Secretary of State agree?

Michael Gove: I agree that these examinations are unfit for purpose and need to change. I also agree with Labour Ministers, who, when they were in power, said:
	“The objective of Ofqual is to ensure consistency between the modular GCSEs and their non-modular predecessors. How it does that will be up to Ofqual.”––[Official Report, Apprenticeships, Skills, Children and Learning Public Bill Committee, 24 March 2009; c. 597.]
	So it should be. Ofqual is an independent regulator, accountable to Parliament. If Ministers were to interfere in Ofqual’s decisions, they would be meddling where they should not interfere. It is deeply irresponsible, cynical and opportunistic for the hon. Gentleman to make the case that he is making.

Stephen Twigg: No wonder the Secretary of State did not want to answer my second question, because I have been looking at what he said when issues to do with exams and tests arose when he was the shadow Secretary of State. In 2008, he said that
	“ministers must be held accountable when the regime fails.”
	He went on to say that it was time to end what he described as
	“This ‘it weren’t me, miss’ approach”.
	Was he not right then, and wrong now? And what was the title of that article? “Minister, you failed the test”.

Michael Gove: For 13 years, Ministers under Labour did fail the test. They failed to ensure that our examinations were modernised and reformed so as to be among the world’s best. This is a test that we are determined to meet. It is a great pity that the Labour party is not joining us in making sure that our state education system is one of the world’s best.

Julian Lewis: Would it assist my right hon. Friend in his admirable wish to reintroduce rigour to GCSEs if pupils who sat them were told the actual marks given, and not just the grades, which are subject to inflation?

Michael Gove: My hon. Friend makes a very good point. The greater the transparency in the grade setting and marking process, the better. That is one of the reasons Ofqual exists as an independent regulator, and one of the reasons it should continue to do that job, not Ministers.

Phil Wilson: If, when Mo Farah had run the 10,000 metre final in the Olympics, he had been told he had to run a further 10,000 metres before he could claim that he had won the gold medal, he would say that that was wrong, so why is it right to change the way GCSE exam results are marked halfway through the academic year, which is what happened this year?

Michael Gove: What is right is to allow the independent regulator and exam boards to decide how these exams should be graded—not, as the Labour party seems to be suggesting, to have Ministers marking papers.

Alec Shelbrooke: May I ask my right hon. Friend to take heed of the message I have received from businesses in my constituency? When it comes to looking at changing the GCSE’s structure, what young people need, and what is fair to them, is a sound GCSE system that allows employers to know that the people who they hire are able to do the job, and that therefore does not put undue pressure on people who would not be able to do the job.

Michael Gove: My hon. Friend makes an absolutely critical point. We need to make sure that standards are comparable over time. The process by which Ofqual ensures that standards are comparable over time was introduced under the last Labour Government. It is a process that Labour Members now disavow for opportunistic reasons, and in so doing they make it more difficult to ensure that our examination system can be reformed on a sound basis. It is a pity that a party that once led on education reform is now clambering on to any bandwagon that passes.

Youth Services

Andy Slaughter: What steps his Department is taking to reform youth services to meet the needs of local communities.

Tim Loughton: Positive for Youth set out for the first time an over-arching vision for youth policy. One of the key principles of its vision is for local leadership and greater partnership in the delivery of services for young people. Local authorities are best placed to decide how best to shape their services, and their duty to secure sufficient services is outlined in revised statutory guidance which we issued back in June. This Government have invested an additional £141 million in a network of 63 Myplace youth centres to support local youth service provision as well.

Andy Slaughter: Will the Minister comment on my local authority’s plans for the youth service? It is cutting its budget by half, closing four of the seven permanent youth clubs to obtain their sites for market sale, and now plans to sell free-for-use sports pitches in a public park to a private company for commercial letting.

Tim Loughton: Given the hon. Gentleman’s record on accounting for supposed children’s centres closures in his constituency, which turned out not to be the case, one needs to scrutinise some of his comments rather more closely. What I do know is that there is some very innovatory work going on in the youth field between the three boroughs in the tri-borough experiment. [Interruption.] Within the hon. Gentleman’s own constituency, in the borough of Hammersmith and Fulham, they are leading the way in youth innovation zones, showing new, practical, innovatory ways of bringing services to young people that they need and will use. [Interruption.] He should go and visit them.

Mr Speaker: There is plenty of scope for an Adjournment debate on this matter, to judge by responses so far.

Henry Smith: Will my hon. Friend join me in congratulating the Ifield youth services on providing a broader range of services to younger people through voluntary sector involvement? Does he agree that voluntary sector and faith involvement in providing youth services is extremely important for local communities?

Tim Loughton: My hon. Friend makes a pertinent point. We share the same local authority—West Sussex—where there is some innovatory practice in youth services, provided not just by the local authority but in partnership with punchy voluntary organisations which know what young people want and can engage with them and make sure that they are engaging with useful services that will aid their well-being, which is what youth services are all about.

Karen Buck: We already know from parliamentary answers that youth services have suffered a disproportionately large cut in public expenditure, but last month the National Association for Voluntary and Community Action released a report which found that its members had experienced a drop of around a fifth of total expenditure, 40% of them making redundancies, and that children’s and young people’s organisations were being disproportionately hit. As the Minister has expressed concern about local authorities disproportionately cutting youth and children’s services, what precise steps is he taking to make sure
	that local authorities and the voluntary and community organisations that he rightly praises are not targeting youth services for a larger share of cuts?

Tim Loughton: The hon. Lady makes my point. I have expressed my concern about the disproportionate effect—in some cases— on youth services that some short-sighted local authorities have exercised. That is why we consulted on and revised the statutory guidance which we issued back in June, and why also, at the core of Positive for Youth—the most comprehensive policy, which her Government never even attempted—are those best placed to have a voice and scrutinise the value of their youth offer: young people themselves. That is why I am about giving a voice to young people and making sure that they have a place at the top table in the town hall—something that her Government never gave young people.

Mathematics

Rob Wilson: What steps he is taking to improve the attainments of the most able pupils in mathematics.

Nick Gibb: The Government have introduced a higher level test in mathematics for primary pupils to ensure that stretch is provided for the most able. More students are able to study further maths A-level as a result of the Department’s further maths support programme. We are also introducing specialist maths free schools for 16 to 18-year-olds, which will offer our most talented young mathematicians the chance to excel in maths.

Rob Wilson: I know that my hon. Friend is aware that we need to do more to encourage the 250,000 students each year who achieve a good GCSE in maths but are discouraged from taking it at A-level. Will the Government introduce a new maths qualification for 16 to 18-year-olds who have a grade C at GCSE but for whom A-level is not suitable?

Nick Gibb: My hon. Friend is right about the importance of maths. We need to do more to encourage even those who have an A to C grade in GCSE maths to continue studying maths, including those who choose not to take an A-level. We want to see the vast majority of students studying maths to age 18 within a decade. The Advisory Committee on Mathematics Education is consulting on options for new qualifications and will provide advice to the Department in the autumn, after which we will decide on the Government’s role in the design of any such qualifications.

Sport

Karl McCartney: What steps he is taking to ensure the development of sport in schools.

Michael Gove: Sport should be a central part of any school. Great schools know that sporting and cultural opportunities go hand in hand with high academic standards. We are introducing a revised programme of study for physical education with a greater focus on competitive sport. We
	are also encouraging more schools to sign up for the highly successful school games. We will make a statement about further measures shortly.

Karl McCartney: I thank my right hon. Friend for that energetic answer. Does he agree that the Government need to focus on improving competition in school sport to counter the culture that existed under the previous Labour Government whereby teachers sought to reward all competitors for fear of dividing children into winners and losers? [ Interruption. ]

Michael Gove: Judging by the reaction from the Labour Benches, that question was, to use a fencing term, a palpable hit. I agree that it is important that we support the growth of competitive and team sports in all our schools. One of the things I have been most impressed by when visiting state schools is the way so many of them are using academy freedoms to provide not only greater facilities but more sporting opportunities for our young people.

Andrew Miller: Will the right hon. Gentleman make it a requirement that free schools provide sport in the way he has just described?

Michael Gove: Free schools are already doing a fantastic job in providing that opportunity—[ Interruption. ] The hon. Gentleman, having missing the penalty the first time, is trying to come back, put the ball on the spot and have another go. The whole point is that free schools are doing a superb job in providing great sporting facilities, and the reason for that is that they are free of the sort of centralist interference that old socialists like him, in their sweet but frankly out-of-touch way, are still nostalgic for.

Pupil Premium

Robin Walker: What plans he has for the future level of the pupil premium.

Sarah Teather: We will continue to increase funding through the pupil premium for the benefit of disadvantaged pupils so that by 2014-15 it will amount to £2.5 billion, double the £1.25 billion we are providing this year. No decisions have been taken on funding beyond 2014-15, which will be part of our spending review considerations.

Robin Walker: Any increase in the pupil premium will be enormously welcome in Worcestershire and other F40 areas where schools rely on it not only to help deprived pupils but to meet their basic funding needs after decades of underfunding. The Secretary of State has said that the funding formula is unfair and needs reform. I urge the Minister to ensure that that happens as soon as possible during the lifetime of this Government so that the pupil premium can reach all those for whom it was intended.

Sarah Teather: I understand that this is an issue my hon. Friend feels particularly strongly about. The Government agree that the school funding system needs reform. We have already announced changes for 2013-14
	that will make the local funding system simpler and more transparent. We will introduce a fair national funding formula during the next spending period. I understand that that is rather longer than he is hoping for, but it is important that we make any changes at a pace that schools can manage.

Kate Green: How will the Minister ensure that spending via the pupil premium reaches the most disadvantaged pupils in schools and actually makes a difference to their outcomes?

Sarah Teather: From this September, schools are required to publish what money they receive through the pupil premium and what they do with it, and to do so online so that councillors, governors and parents can scrutinise what is happening with that money. Similarly, Ofsted is focusing much more on the efforts schools are making with disadvantages students. Of course, we are publishing key stage 2 and 4 results for students eligible for the pupil premium separately. This is all part of a picture of increasing transparency. Of the schools I have visited, many are already using it for innovative and interesting projects. I encourage the hon. Lady to ensure that all the schools in her constituency have all the children who should be on free school meals claiming them to ensure that they actually get the money they are owed.

Internet Controls

Claire Perry: What level of response the UK Council for Child Internet Safety received to its consultation on parental internet controls.

Tim Loughton: As co-chairs of the executive board of the UK Council for Child Internet Safety, the Minister for Equalities, who is also responsible for criminal information, and I launched a consultation on parental internet controls on 28 June. The consultation closes on 6 September and the final number of responses will not be known until then, but to date there have been no fewer than 600 responses from parents, members of the public, charities and businesses.

Claire Perry: Members across the House will pay tribute to the Minister and his UKCCIS team for setting up this important inquiry.
	We know that 83% of parents are deeply worried about how easy it is for young people to stumble across or find adult material online. Does the Minister think that enough of those parents’ voices are going to be heard in what is quite a technical consultation? Is he looking forward to getting a 110,000-name petition from parents, proving that parents are very interested in this point?

Tim Loughton: I pay tribute to the work that my hon. Friend has done on this important issue. She is absolutely right. I absolutely want the internet to be a safer place for our children, and I am open to any suggestions to bring that about. However, a joint effort is needed, which is why UKCCIS is a union of lots of different interested parties. But parents are absolutely at the heart of the issue: they need to know what to look out
	for in respect of their children’s internet access at home and to talk to their children to make sure that they are safe. We all have a role in this, and I praise the contribution that my hon. Friend is making.

School Playing Fields

Chi Onwurah: What measures he has put in place to prevent the sale of academy school sports playing fields.

Michael Gove: No disposal of publicly funded playing field land at an academy may take place without the Secretary of State’s consent. The Government will agree to the sale of playing fields only if the sports and curriculum needs of the academy and its neighbouring schools can continue to be met. Sale proceeds must be used to improve sports and education facilities.

Chi Onwurah: The Secretary of State made sure that academies were accountable only to himself and then decided that all state schools should become academies. But he gets his figures wrong on playing fields, overrules his own advisers, exempts academies from most of his own policies and, in any case, focuses all his time and his Department’s money on free schools. How can we have confidence in him on sport or anything else?

Michael Gove: I am proud of the success of academies and free schools, but they are not the only thing that the Government are doing; we are also making sure that we improve inspection, teacher recruitment, the curriculum and examinations. As for playing fields, we have ensured that the rules have changed so that they are better protected under this Government than they were under the last one.

Topical Questions

Iain Wright: If he will make a statement on his departmental responsibilities.

Michael Gove: It is a pleasure to announce that 55 new free schools are opening this year. They will provide young people across the country with a high standard of education and the facilities that they deserve. I am delighted that we are building on the good work of Labour reformers such as Lord Adonis in bringing forward the programme.

Iain Wright: How on earth can it be fair that pupils in Dyke House and High Tunstall in my constituency, as well as those in other constituencies, could obtain the same mark in the same subject from the same examining body in the same year and yet get different grades? What urgent work is the Secretary of State doing to ensure that pupils affected are not disadvantaged and that they will be able to take up the college place or apprenticeship course of their choice?

Michael Gove: The hon. Gentleman has been a highly effective Minister in his turn and he knows how important it is, when dealing with questions of examinations, to ensure that there is consistency over time. He will also be aware that Ofqual, the regulator, is the appropriate body to look into these matters. It published an interim report last Friday, which I hope he has had the chance to read. He will be aware that Ofqual is doing more
	work this week and will be talking not just to teachers’ representatives but to all interested parties. I hope that he will make a submission to Ofqual.
	The hon. Gentleman will also know, as a former Minister, that Ofqual is accountable to Parliament and not to Ministers. That means that if there are further questions to be asked of Ofqual beyond those that I and other Ministers are asking, it may be appropriate for the House to ask those questions, through the Select Committee or other means.

Tom Brake: Carshalton boys sports college, whose pupils are active in the community, has been badly affected by the AQA blunder. What reassurances can I give those pupils that their futures are not going to be blighted?

Michael Gove: Again, I stress that Ofqual is the appropriate regulator and will want to hear from all schools affected. The report that I hoped would be delivered and which Ofqual did deliver rapidly this Friday dealt in broad terms with the issues about grade boundaries. However, there may be school-specific cases that, like the hon. Member for Hartlepool (Mr Wright), my right hon. Friend, as an assiduous constituency Member, may want to bring to Ofqual’s attention. I encourage all MPs who believe that there are specific cases that defy logic in schools of which they are aware to bring them to Ofqual’s attention.

Kevin Brennan: The Secretary of State said earlier that this year’s problem arose because the modular English exam was “unfit for purpose” so nothing could be done to rectify the injustice this year, yet the same exam will be sat next year. Is he saying that next year’s pupils can look forward to the same injustice on his watch?

Michael Gove: It was a Labour Government who introduced modularisation of GCSEs. We made it clear that we thought that was a mistake and we moved as quickly as possible to end it. I hope that we can count on the hon. Gentleman’s support in making that reform.

Andrew Stephenson: My right hon. Friend will know that schools will shortly have a duty to provide comprehensive and independent careers advice to their pupils. What support will he provide to schools to ensure that that they meet these important new obligations?

John Hayes: My hon. Friend will know that this Government take careers advice very seriously, which is why we established the National Careers Service. He will also know that we have not only changed the law, ensuring that schools secure independent advice and guidance, but introduced statutory guidance for schools and, furthermore, a practical guide to how they should go about it. This is a record that we can be proud of and that the whole House should enjoy.

Barry Sheerman: Where was the Secretary of State when so many parents and young people were traumatised by what was happening with GCSEs? Why did he not go on radio and television to explain his position? None of
	us wants him to interfere with Ofqual, but over the past two years he has been responsible for producing a climate of fear in which Ofqual and the examination boards operate.

Michael Gove: I am grateful to the former Chairman of the Select Committee for his points about Ofqual. The most important of his series of comments was his assertion that none of us would like Ministers to interfere in Ofqual’s operations on grade boundaries and grade setting—a mature and appropriate point. More broadly, he asked where I was when the GCSE results were announced. On that day, I took the opportunity to give interviews to the BBC, ITV and Sky to explain my concerns about the situation that we inherited from the previous Government. Ever since then, I have been doing everything I can in my Department, with the help of my Ministers and the superb team of civil servants we have, to ensure that we can reform examinations for all students.

Jeremy Lefroy: I welcome the help that the Minister for Further Education, Skills and Lifelong Learning and the Skills Funding Agency have provided in showing flexibility over the number of 16 to 18-year-old apprentices taken on by my local college in Stafford. How can he ensure that this common-sense attitude always prevails?

John Hayes: I am grateful to my hon. Friend, who has been a doughty champion of his local college and has visited me with its representatives to make its case. The answer is that we need to give colleges more freedom and flexibility to respond to local demand. That is why I simplified the funding regime, why I cut the number of statutory duties that colleges are burdened with, and why we removed a number of intermediary bodies. We believe in trusting colleges to respond to local learners and local businesses in Stafford and elsewhere.

Emma Reynolds: We should be incredibly proud of Team GB’s Olympic success, including that of my constituent, gymnast and bronze medallist Kristian Thomas. Does the Secretary of State agree with the Government’s own school sports adviser, Dame Kelly Holmes, that two hours of PE per week should be compulsory in schools?

Michael Gove: Let me congratulate the hon. Lady’s constituents on their achievements. I know that Wolverhampton, which I think held a marathon only this weekend, is a place of sporting excellence. Dame Kelly Holmes has done a fantastic job as adviser and continues to help us in every way, but although we should do everything possible to encourage the maximum participation in and enjoyment of sporting and physical education, compulsion of the kind that she has called for is not something I believe in.

Steven Baker: Apprenticeships are being promoted vigorously by the Government, but what progress is being made on the higher levels and, in particular, on their quality?

John Hayes: Proust said:
	“We do not receive wisdom, we must discover it for ourselves, after a journey”,
	and a journey from the age of 16 to higher learning can be a journey down a practical pathway—no longer a cul-de-sac but a highway to higher learning. To that end, I am working to create 25,000 higher apprenticeships during this Parliament; when I became a Minister, there were 180.

Alex Cunningham: The Department’s consultation on the future of child care ran for all of 44 days over the school summer holidays, greatly limiting the potential for parents to make their views heard. Given the importance of this issue, will the Minister reopen the consultation for at least another six weeks? If not, is that because she and her colleagues have already decided what they are going to announce during conference?

Sarah Teather: We have had a lot of responses, but I am afraid that I cannot give the hon. Gentleman the precise number. If he has constituents who wish to make their views known, I would be happy if they were to write to him and he were to write to me. If he does that quickly, I will make sure that I take them into account.

Robert Halfon: Today I visited Burnt Mill school in Harlow. Three years ago, 27% of its pupils had five good GCSEs with maths and English. This year, the figure was 72%. Does that not show that with the right vision, leadership and teaching, the best academic results can be achieved?

Nick Gibb: My hon. Friend is absolutely right. I offer my congratulations to the head teacher, Helena Mills, and all her staff on the tremendous achievement that that school has delivered over the past few years in raising the standard of GCSE achievement of its pupils. That shows that with good leadership and high expectations, all our children can achieve to the best of their ability.

Nick Brown: I thank the Secretary of State for meeting me to discuss cadet forces in state schools. The problem remains: how does the BTEC in uniformed public services count towards the performance tables? If he can find a way to resolve that issue, he will have the gratitude of my constituents.

Michael Gove: I am grateful to the right hon. Gentleman. He has raised the case of the academy in Wallsend in his constituency brilliantly. My officials are looking at what we can do to build on that school’s successes.

Michael Fallon: Will the Secretary of State confirm that from this month it will no longer take a whole year for schools to dismiss the very small minority of teachers who turn out to be professionally incompetent? Will he reassure us that that is just one of a series of future reforms that will give schools and head teachers more control over their own schools?

Michael Gove: My hon. Friend is absolutely right. The rules have changed and we will make it easier for head teachers to deal with underperforming staff. In the most extreme cases, that means that the underperforming staff will have to go. I want to ensure that head teachers are given the resources and time to ensure that underperforming staff can improve, because we all know that every child deserves to have a high-quality teacher for every moment in class.

Meg Hillier: As one of the MPs representing Hackney, which 10 years ago was one of the worst performing boroughs in education, I want to draw the Secretary of State’s attention to our excellent exam results, with more than 60% of pupils getting five A to C grades at GCSE, including maths and English. Mossbourne community academy gained a result of 89%, which is exceptionally good. However, within that there were real challenges for pupils sitting the English exam. At BSix college, for example, for the previous three years, 83%, 86% and 83% of pupils respectively gained a C or above, but only 36% did so this year—

Mr Speaker: Order. We are extremely grateful. We need short questions in topicals.

Michael Gove: Hackney is a model authority when it comes to educational reform. I mentioned earlier, and I underline again, that if MPs feel there are cases of specific schools that it is worth investigating, they should bring them to Ofqual’s attention.

Justin Tomlinson: When a youth service is failing to meet the needs of its local communities, would the Minister support switching the funding to organisations such as sports groups, scouts and guides, so that they can extend their constructive engagement with young people?

Tim Loughton: My hon. Friend makes a very important point. We have some fantastic youth groups, voluntary organisations and people around the country with a passion for engaging young people and a knowledge of how to do so, who in the past have been frozen out too much from the local offer. In future, they need to be part of the offer for young people locally, and must work with local authorities and schools to ensure that young people get the very best opportunities.

Jenny Chapman: In Darlington, 50 young people at St Aidan’s academy should have got a C this year but got a D. That is not a one-off case; there are schools like it up and down the country. The Secretary of State has said that he is sad about this matter. Does he think that it is fair?

Michael Gove: I think that the GCSE, which was introduced under the last Government and was sat by students this time around, is not fit for purpose. Any specific questions about grade boundaries are properly a matter for examination boards and for Ofqual, the independent regulator. As I mentioned earlier, it would be quite wrong for Ministers to attempt to mark exam papers.

Bob Russell: Although I represent a garrison town, I do not agree with having cadet forces in schools. Will the Secretary of State tell the House where all the cadet officers and leaders will come from?

Michael Gove: This is a first—I do not think that until now I have ever disagreed with any word that the hon. Gentleman has said in Education questions. Thanks to the fantastic work of the Under-Secretary of State for Defence, my right hon. Friend the Member for South Leicestershire (Mr Robathan), and his team, and the UK Reserve Forces Association, great steps forward are being taken to ensure that more schools have cadet forces. I was overjoyed a couple of months ago to read an op-ed article penned by the hon. Member for Liverpool, West Derby (Stephen Twigg) and the right hon. Member for East Renfrewshire (Mr Murphy), which said that there should be more, not less, military involvement in all our schools. I am pleased to see that there is a pact of steel across the Front Benches on this issue.

Frank Field: The regulator has said that if the marking for this summer’s English exams had been the same as the marking in January, it would have made a 10% difference to results. Given that fact, might not the Secretary of State have a word with the regulator to encourage the re-marking of borderline cases in grade D, with that 10% being added to the score?

Michael Gove: I am sure the regulator will have heard the right hon. Gentleman’s case, but it is vital that we maintain its independence. If we were to subject it to ministerial inference, that would undermine the point of having an independent regulator in the first place.

Matthew Hancock: Will the Secretary of State join me in welcoming the start this month of IES Breckland in Brandon, a free school? It means that there will be secondary education in Brandon thanks to the free school programme, which there would not have been without it. It provides a local future for the schooling of people in Brandon.

Michael Gove: There have been three reasons to celebrate in Suffolk over the past four weeks: first, a new free school in Brandon; secondly, a new free school in Beccles; and thirdly, my hon. Friend coming first in a handicap race at Newmarket in his constituency and, in so doing, raising money for some of the most deserving cases in the military and equestrian worlds.

Nicholas Dakin: GCSE English is a progression qualification. From my 30-plus years in education and from listening to heads, teachers and local young people, it is clear to me that this year’s marking is a fiasco. Will the Secretary of State urge Ofqual to ensure fairness across the whole of this year’s entry group and not hide behind unacceptable comments such as that the entrants in January “got lucky”?

Michael Gove: I am sure the regulator will have heard the hon. Gentleman’s case. As I have said before, he was the head of an outstanding further education college. However, it is only appropriate to say that when the regulator appeared before the Education Committee, she made it clear that she saw it as her mission to deal
	with problems associated with grade inflation. It was on that basis that a Committee of this House approved her appointment.

Gordon Birtwistle: More than 20 children in my constituency have not been allocated any of their three preferences for primary schools, leaving some children without a school place this year. Will the Secretary of State meet me to hear a solution proposed by a local headmaster, which Lancashire county council refused to discuss?

Michael Gove: Of course.

Mr Speaker: Order. Before I call the hon. Member for Islington North (Jeremy Corbyn) to ask his urgent question, I should emphasise to the House that owing to the pressure of business, I intend to let the exchanges on the urgent question run for no longer than half an hour. I hope that is helpful to the House.

London Metropolitan University

Jeremy Corbyn: (Urgent Question): To ask the Secretary of State for the Home Department if she will make a statement on the decision by the UK Border Agency to remove tier 4 sponsorship status from London Metropolitan university.

Damian Green: The UK Border Agency has been working closely and continually with London Metropolitan university since March to address its systemic issues. In the most recent audit, the UKBA found concerns in three specific areas: students studying without permission to be in this country, how international students are recruited and the attendance monitoring of students. In those circumstances, allowing London Met to continue to sponsor and teach international students was not an option.
	Institutions must comply with the rules, whether they sponsor 10, 100 or 1,000 international students. That includes having a system to check that students have the right visas to study in the UK, and monitoring the attendance of students. Universities must ensure that students can speak English and have the right qualifications to study at degree level. The UKBA found systemic failures that meant that London Met had not been able to ensure the appropriate admission and tracking of students from abroad.
	We understand that genuine international students at London Met will be concerned. That is why a taskforce has been created, which includes the Higher Education Funding Council for England, Universities UK, the Department for Business, Innovation and Skills, the UK Border Agency and the National Union of Students. The taskforce is working with London Metropolitan university to help genuine, appropriately qualified students find another education provider to sponsor them. Three UKBA staff are currently based in a help centre set up by London Met to support and advise students.
	The UK Border Agency will contact students of revoked institutions when they curtail their leave. It is only when students have their leave curtailed that they will have 60 days to find a new institution or leave the country. This 60-day period does not begin when the institution is revoked. UKBA recognises the unique situation with London Metropolitan university and will not begin writing to students to curtail their leave until 1 October.
	But let us be clear: these particular problems have been identified at one university, not the whole sector. The Government recognise the important contribution that international students make to the UK’s economy, and to making British universities among the best in the world. Britain is and will remain a top-class destination for top-class international students.
	Education providers have to meet strict standards, ensuring that they provide high-quality education, and take their immigration responsibilities seriously. I am sure that the House agrees that enforcing these strict standards is an important role for UKBA, and a vital part of restoring confidence in our immigration system.

Jeremy Corbyn: It is interesting that the Minister put no figures whatever on the number of students at London Met university who have apparently not fulfilled UKBA’s requirements. One can only begin to get the impression
	that the Government want to pick on a university that has done good work in assisting overseas students as well as helping a lot of people into higher education who would not otherwise have had that chance.
	The Minister wrote to me at the weekend and said:
	“Those students however who are already attending the University and who have valid leave to remain do not have to do anything immediately.”
	That is a strangely complacent answer to give the 2,600 students at London Met university who paid good money to study hard in order to achieve qualifications to go home. If they cannot find another university, are unable to complete their courses and subsequently deported, what impression will their home country have of Britain? What attitude will those countries have towards this country in future when, through no fault of their own, students have been denied the right to complete a course for which they paid a great deal of money? The image that that presents around the world is appalling—it suggests that overseas students may well be deported from this country because of a decision made by the UK Border Agency without its providing any detail about the basis of it.
	Why cannot the Government do a couple of things? First, they should allow the 2,600 students to complete their courses at London Met university rather than have to try to find somewhere at the beginning of September when courses are starting in a few weeks. Secondly, they should work with the university to ensure that if things have gone wrong, they can be put right because the same thing could happen at any other college or university. One gets the impression that the decision to try to crack down on bogus English language schools some years ago—and no one has any time for bogus language schools—has been transferred to the higher education sector.
	Almost a third of London Met university’s income comes from overseas students. The same figures apply to many other higher education institutions. The decision throws into jeopardy the very future of that university and damages the image of British higher education around the world. Every university in this country has cause for concern about UKBA’s decision. I ask the Minister please to think again, reverse the decision, allow those students to complete their courses and the university to continue to recruit overseas students after the systems have been put in place to ensure that the law is correctly followed. That would support Britain’s higher education sector. Instead, the Government have chosen to attack it, attacking every university and college in the process. I ask them please to change their mind.

Damian Green: The hon. Gentleman asks for some figures, so let me give him some from the samples considered by UKBA. Some 101 students whose visas had already been refused were selected. Of those who had no right to be in this country studying, 25% were studying at London Metropolitan university. A wider sample was taken of two separate random groups of 300 students—600 students. More than 60% of students were involved in one or other of the problems that I identified in my answer to the hon. Gentleman’s original question. It was not a small, isolated number of students; the sampling showed significant systemic problems throughout. The hon. Gentleman appeals for all the students concerned to be allowed to carry on studying
	in this country, but he cannot seriously believe that someone who has no right to be here, is not educationally qualified and does not speak English to a level that enables them to benefit from a university course in this country, should be allowed to stay in this country.
	The hon. Gentleman’s second main point was that the situation damages the university sector as a whole. What damages the university sector as a whole is when individual institutions do not meet their proper obligations under the immigration rules. For years, what has damaged confidence in the immigration system is that those rules have not been properly enforced. This Government are determined properly to enforce the rules set down by the House.

James Clappison: Has my hon. Friend had the opportunity of seeing the voluminous evidence produced in various reports by the Home Affairs Committee on the abuse of student status in the immigration system? Given the circumstances that have now arisen, would it not have been unacceptable if the Government had ignored that breach of immigration control and sought to take no action? My hon. Friend has taken an entirely appropriate course.

Damian Green: I am grateful for the support of my hon. Friend and, more widely, of the Home Affairs Committee. For some time, it has urged me and my predecessors in the previous Government to ensure that proper action is taken against those who abuse the student visa system. We have already taken extremely effective action against the bogus colleges referred to by the hon. Member for Islington North (Jeremy Corbyn) in his initial question, and over 500 fewer institutions are able to bring in foreign students as a result of the tough and proper requirements that we have placed on those colleges. If the rules apply to the private sector, they must apply to the public sector as well. Universities must obey the rules just as much as private colleges.

Chris Bryant: The Opposition fully support the Government’s attempts to tackle bogus colleges and stop immigration fraud. If colleges are incapable of ensuring that every applicant is a bona fide student and speaks English sufficiently well to study, they should lose their highly trusted status. However, our universities are vital to Britain’s economic future. We need to foster an international reputation for high-value education, not undermine it. The Government have engaged in classic diversionary tactics. First, they briefed the press on Saturday that London Met was going to lose its highly trusted status. On Sunday, the Minister denied it on the radio, but then announced it—surprise, surprise—on the day that statistics showing that the Government have no prospect of reaching their declared immigration target were published. Talk about dither!
	Will the Minister confirm precisely how many of the 2,700 students with certificates to attend studies at London Met are, in his terms, illegitimate—precisely how many? How many are already in the country and how will the Minister establish their whereabouts? How many does he expect to seek to deport, and when? What will happen to those arriving at British ports in forthcoming days? The Minister accepts that the vast majority of
	London Met students are legitimate, genuine. Is he really saying to a foreign student who has saved up for years, paid their way, done nothing wrong and studied hard for two years at London Met, that they should simply pack their bags and go back home? I hope not.
	The Government have acted at the most disruptive time of year, in the most disruptive way—yet more ministerial incompetence. Legitimate international students bring in £3.3 billion to this country’s economy. I just say to the Minister, “Baby” “Bathwater.”

Damian Green: Let me try to find some substance to respond to in the hon. Gentleman’s rant. On his first point, I pray in aid something that I know he is familiar with, as I know he is assiduous in following his brief: the conclusion of the most recent report from the Home Affairs Committee on the work of the UK Border Agency. It was published on 23 July and states:
	“If a sponsor is failing to comply with their duties or is deceiving the Agency then their licence should be revoked. The Agency should take tough enforcement action against those who abuse the immigration system.”
	I am very glad that within weeks of making that recommendation the Committee has been able to see the Government carrying it out.
	The hon. Gentleman made the ludicrous point that this announcement was made on the same day as the immigration figures were published. I rather regret that, because I would have liked more coverage of net migration coming down by 36,000 and visas being issued at their lowest level since 2005, precisely because the figures show that—after the years of neglect under the Labour Government—we now have a Government who are effective in bringing immigration down.
	The hon. Gentleman asked a specific question about arrivals. The Border Force is instructed to allow into the country those who arrive with a visa for London Metropolitan university. We will give them temporary leave to remain and they can take part in the taskforce process. The taskforce is setting up a clearing house to find other sources. He also asked about numbers, but he may not have been following the story closely enough. The whole point about the problem with London Metropolitan’s system is that it does not know whether the students are turning up for lectures. It does not know whether they can speak English or not. As I have already detailed, of the sample of 600, more than 60% have one or more problems. It is precisely because London Metropolitan does not know the status of its students that we say that it has a systemic problem, and that is why we have had to revoke its licence.

Several hon. Members: rose —

Mr Speaker: Order. I appeal to colleagues for short questions and indeed to the Minister for mercifully shorter answers.

Mark Field: London Met, part of which is in my constituency, has been a troubled institution. I accept, with some regret, that the UKBA needed to make a stand. I am glad that the Minister has gone into some detail about the arrangements that are being made, but does he recognise that there is a strong duty care owed by the UKBA and the whole higher education organisation to those students
	who are about to start the final year of their studies? They may well have been at London Met for two or three years, and they must be looked after. If necessary, I hope that he will make a special case for some of those students in the weeks ahead.

Damian Green: That is precisely why we have set up the taskforce immediately with two main tasks, one of which is to find new courses and institutions that are willing to take London Met’s students. It will then move on to individual cases and ensure that those who are genuine students can obtain the appropriate visas and leave to remain to attend the courses that they wish to attend. The taskforce is up and running already, and happily several institutions are looking to take on former London Metropolitan students.

David Blunkett: I have a general declaration on the register.
	I put it to the Minister that nobody could possibly be against rigour in this area, but the sector as a whole has been bedevilled by bellicose statements, by constant changes in the rules and, in this case, by the timing. Above all, is not the message being sent to the global education community that this country is not welcoming those students who previously would have seen Britain as their first choice for university education?

Damian Green: I appreciate that the right hon. Gentleman has connections with an institution that is itself closely connected with London Metropolitan—I am not aware of any problems with that other institution. The message being sent out is quite clear: as I have said, Britain absolutely welcomes the brightest and the best; we want the best students from around the world coming to our universities, some of which are themselves among the best universities in the world. However, the message also has to go out to the university sector and individual students that they have to be genuine students, be able to speak English and be properly qualified to benefit from a university education in this country, and that they cannot use a student visa as a loophole in our immigration system to come here and work. That went on for far too long; now it is stopping.

Michael Crockart: The Minister mentions the Home Affairs Committee report. One of its reports recently urged the Government to remove students from the immigration statistics and instead use the OECD measure. If he agreed to that recommendation, it would surely remove much of the push for such heavy-handed, rhetoric-induced action by the UKBA.

Damian Green: Of course, I reject the hon. Gentleman’s point that this is heavy-handed—and it is the opposite of rhetoric. Instead of years of Immigration Ministers from the previous Government talking tough and acting weak, we now have a Government who are acting tough as well. On the point about immigration statistics, it is a UN definition that an immigrant is somebody who comes to a country with the intention of staying for more than one year. Students who come for less than one year do not count in the immigration statistics. Students who come for more than one year do count. It would be simply perverse to say that someone coming
	here for a four-year course is less of an immigrant than somebody who comes here to work for 15 months on a work visa. That would be simply absurd.

Keith Vaz: I am glad that the Minister reads the Home Affairs Committee reports with such care. He is right that action has to be taken to deal with immigration abuses. This morning, however, I went to the university and met a number of international students. Only one has been offered an alternative course, but he has to repeat his year, pay another set of fees and pay the UKBA visa fee. Incidentally, the Minister talked about the taskforce, but it has not yet arrived—there is no taskforce at the university. It is due in next week. Will he confirm that there were no dealings between the UKBA and the university between 16 July and 7.45 pm on 29 August, and that there are no other universities on his list for removal of this status?

Damian Green: The right hon. Gentleman asks two substantive questions. His first point is simply wrong. The process started in March, and there were meetings in May. London Metropolitan submitted a representations pack to the UKBA in May and, as he said, the suspension came on 16 July. There was a meeting between London Met’s vice-chancellor, his senior staff and their lawyers, and the UKBA on 23 July, and an audit took place on 3, 6 and 7 August. London Met’s lawyers put in submissions on 8 August and 24 August, and the revocation was on 29 August. It is simply not the case, then, that there were no meetings in between—there was continual contact.
	The right hon. Gentleman made a second point about other universities. As he will know, and as his Committee constantly recommends, the UKBA carries out a continual series of audit visits to institutions—both universities and other educational institutions—and will continue to do so. I can say, factually, that at the moment no other university has had its licence to bring in non-EU students suspended.

Amber Rudd: Reducing immigration levels is important to my constituents, who welcomed the admission by the Leader of the Opposition earlier in the year that there had been uncontrolled immigration under the previous Government. May I urge the Minister, therefore, to reform all routes of entry into the UK, including the student visa route, in order to build on the reductions he has already achieved?

Damian Green: I am grateful for my hon. Friend’s support. She is quite right. As the House knows, about two thirds of all visas issued to people coming to this country are student visas, and there has been very widespread abuse of this route in recent years. That is why the enforcement action to ensure that, whether in the private or public sector, we get rid of that abuse is good not only for our immigration system but, in the long run, for our education system, because around the world people will know that British education is being properly monitored and run.

Frank Dobson: How can the Minister believe that punishing students who are entitled to be at London Metropolitan university fits in with any British feeling of fairness?

Damian Green: That is precisely why we have set up the taskforce, which will help those individual students—of course there will be genuine students: some will be in the middle of their courses and some will be about to arrive for them—and ensure that, as fast as possible, they can have courses of equivalent value and that the credits they have built up can be carried over to their new courses, so that there is no unfairness to those genuine individual students.

Sajid Javid: I warmly welcome my hon. Friend’s statement and endorse the decision of the UKBA. Although there will be genuine foreign students who are concerned and anxious, does he agree that there is only one institution to blame for their predicament, and that is London Met university?

Damian Green: I agree with my hon. Friend that the vast majority of universities have been able to cope with the recent growth in foreign students without any problems. We have had to suspend the licence of two other universities since we started effective enforcement action. Both universities managed quickly to resolve the situation and ensure that they could continue as sponsors. That is not the case with London Metropolitan, where the situation is significantly more serious than any previous case we have seen. Indeed, the institution itself must bear the responsibility for what happened in this case.

Barry Gardiner: Since the third-year students came to this country, the visa conditions have changed. For those third-year students who are unable to secure a new university course within the 60-day period, will the Minister apply the same visa conditions that applied when they came to this country—with the full expectation of finishing their courses at London Met—so that their partners will therefore be allowed to work, which for many is an important source of funding that enables them to be here?

Damian Green: I do not think that it would be appropriate to announce relaxations in the rules. Indeed, the hon. Gentleman may not have heard, but I have said that the curtailment letters that start the 60-day period will not go out until 1 October, to ensure that we enable those people to come and find a new course. However, he has also revealed—perhaps inadvertently—one of the problems: people are coming here as students precisely so that they or members of their family can work. People who come here to study should come here to study. That is what the student visa is meant to be for. It should not be, either directly or indirectly, a way to gain a work visa.

Tom Brake: London Metropolitan university suggests that the UKBA’s concerns relate to a previous administration or previous management. What reassurances can the Minister give that the decision is fair and based on current processes and data, and that London Metropolitan university is not being singled out as an example?

Damian Green: I have heard that suggestion from London Metropolitan, which is precisely why, when the concerns were first expressed after a visit in March, the UKBA deliberately looked for contemporary samples. The figures I gave earlier to the hon. Member for
	Islington North relate to students who have come under the new management regime, so we are talking about up-to-date systemic problems, not historic systemic problems.

Mark Reckless: I congratulate the Minister on cutting immigration, with student visas down by over 100,000. Might his action against London Met have a further salutary effect, by showing that universities as well as colleges have to uphold immigration control?

Damian Green: Absolutely, and not just universities and colleges, of course, but employers too. The message that we have been sending out for some time is now getting out there. Everyone who is a highly trusted sponsor needs to behave like a highly trusted sponsor. If they cannot be highly trusted, they will no longer be a highly trusted sponsor and allowed to bring in foreign workers or foreign students.

Frank Field: Was the Minister as surprised as I was that the institution was not a back-street language college but a mainstream university, and that its action has damaged our standing in this market in the world? However, let me bring him back to the substantive point made by my hon. Friend the Member for Islington North (Jeremy Corbyn). Is there anything that this House can do to save the Government from being in the position of wishing to deport the illegal students—although none will be found—while actually deporting proper students who have paid up and should be in this country?

Damian Green: I can assure the right hon. Gentleman, for whose general support for this action I am grateful, that as part of a wider policy we are now doing much better at enforcing the removal of people who overstay their visas, including students. Indeed, we have run a campaign over the past few months and, in London alone, we found 2,000 over-stayers, whom we have removed. Each student at London Metropolitan will go through the visa process as normal when they get a new offer, and at that point the UKBA will be able to assess whether they are genuine students.

Several hon. Members: rose —

Mr Speaker: I called two Members from the Government side, so it is still the Opposition’s turn. I call Gisela Stuart.

Gisela Stuart: May I press the Minister further on his response to the Chairman of the Home Affairs Committee? Are there any other higher education institutions, specifically in the west midlands or Birmingham, whose highly trusted sponsor status the UK Border Agency is considering withdrawing?

Damian Green: As I said to the Chairman of the Select Committee, the UKBA carries out a continual programme of monitoring and auditing educational institutions and other institutions all around the country. In three cases that has led to the suspension of a university’s licence to bring in students, but only in this case has it led eventually to revocation. At the moment, there are no universities whose licence is suspended.

Andrew Selous: Does my hon. Friend agree that universities that allow in master’s students who cannot even string together a sentence of English let down not only the students but the whole of the British university system?

Damian Green: I agree. The point is often made by students at some institutions that they find themselves being taught alongside people who find it difficult to benefit from the course. That is one of the reasons that we have reintroduced the practice of interviewing people before they come here. We are doing that on a pilot basis at the moment, and it is already proving extremely useful in ensuring that people who cannot benefit from higher education in this country do not come here in the first place.

Nick Raynsford: Does the Minister not accept that there is a world of difference between applying the rules and withdrawing the highly trusted sponsor status in respect of future applicants, and retrospectively penalising existing students, many of whom are here legitimately and fairly and have paid their fees? It is that element of retrospection that is so wrong and that goes against all our principles of justice in this country.

Damian Green: As I have said, the systemic problems at London Metropolitan are so great that it is impossible for the university itself to know who meets the required criteria. It is therefore essential to revoke its status and, to be fair to the individual students, to set up a taskforce so that they can be put back into the education system at an appropriate place to do an appropriate course as soon as possible.

Graham Evans: Why does my hon. Friend think that such action was not taken by the previous Government?

Damian Green: It was because the previous Government had neither the will nor the intention to enforce the immigration rules that this House passed. This Government do have the intention to have properly ordered immigration rules and to enforce them properly as well.

John McDonnell: May I return to the question of existing students, for whom the situation seems grotesquely unfair? Term starts in a month’s time, but they will not receive their letters until after 1 October. They will then have 60 days, but they will more than likely be unable to find another institution, unless that institution is given some financial incentive to take them. Could we not at least give an assurance to those students who are found to be legitimate that they will be able to continue their studies and complete their courses at London Met? Otherwise, they will all lose at least a year.

Damian Green: I think that the hon. Gentleman has slightly misunderstood the process. The students will not get their letters of curtailment for a month, but they obviously know now that they need to find a new course. The taskforce is operating now, so his last point about their having to waste a year will, I hope, not be true in the vast majority of cases. We have set up the taskforce, and we took action as soon as the evidence was available precisely so that we would not have to do so in the middle of anyone’s course.

Several hon. Members: rose —

Mr Speaker: Order. I apologise to colleagues who did not get in, but time is against us and we must now move on.

House of Lords Reform Bill

Nicholas Clegg: With permission, Mr Speaker, I would like to make a statement on House of Lords reform—or what is left of it. [Interruption.] Members will be aware that the Government have decided not to proceed with the House of Lords Reform Bill during this Parliament, and I can confirm that the Government have today withdrawn that Bill. [Hon. Members: “Hooray!”] I am not as happy about that as Members sitting behind me. I set out these intentions during the parliamentary recess, in the light of widespread media speculation over the reforms. At that time, I committed to making a statement to Parliament at the earliest possible opportunity, which I am doing today.
	The House will be familiar with the sequencing of events, but let me give a brief recap. [Interruption.] No, I will not start as far back as 1911. Lords reform was in the coalition agreement, reflecting separate commitments in each of the main parties’ manifestos and based on the simple principle that those who make the laws of the land should be elected by those who have to obey the laws of the land. In May 2011, the Prime Minister and I committed to holding the first of those elections in 2015. The Government’s proposals have drawn heavily on previous attempts at reform led by hon. Members from all parties in this House: the White Paper in 2008 from the right hon. Member for Blackburn (Mr Straw), whom I am delighted to see here; the late Robin Cook’s “Breaking the Deadlock”; the House of Lords Act 1999; Lord Wakeham’s royal commission; and everything that went before.
	Despite that long bloodline, it was always clear that delivering Lords reforms would require a degree of cross-party support, which the Government have sought for the past two and a half years. Soon after the election, we convened cross-party talks—I believe we had seven meetings. We then published a White Paper and a draft Bill, which were scrutinised by a Joint Committee of both Houses. When the Committee reported, the Government accepted the majority of its recommendations. I thank its members again for that work and I am only sorry that their contribution will not be brought to fruition, at least not during this Parliament. The Joint Committee endorsed a mainly rather than wholly elected Chamber—that was not my preference, but for the sake of progress, it was something we accepted. It also recommended that we increase the size of the reformed House from the proposed 300 Members to 450—again, we conceded on that. In order to alleviate fears over the primacy of the Commons, the Government also agreed to put the Parliament Acts on the face of the Bill. In response to continued concerns over the relationship between the Commons and the Lords, and at the request of coalition colleagues, we also amended the draft Bill so that elections to the Lords would happen on the basis of a semi-open list system, based on larger regions, instead of the single transferable vote.
	So, shaping our proposals was a painstaking process, in which the Government courted compromise at every turn, and in July of this year this House voted—overwhelmingly—in favour of the Bill on Second Reading,
	with 462 in favour and 124 against. However, in spite of all that, it is now clear that we will not be able to secure the Commons majority needed to pass the programme motion that accompanies the Bill. Without that motion, the Bill effectively becomes impossible to deliver, because it cannot be kept on track; the Bill’s opponents will be able to block reform by unreasonably dragging out parliamentary debates. That is a situation I clearly cannot allow, not least with Parliament facing so many other pressing issues, particularly in terms of jobs and growth.
	So, regrettably, the coalition will not be able to deliver Lords reform during this Parliament. The hard work of many Members of this House, and the other place, to shape this Bill has, I believe, inched us forward, and my hope is that we will return to this matter in the next Parliament, emboldened by the historic Second Reading vote. For now, the immediate decision for the Government is how we fill the gap in the legislative timetable. We will bring forward measures to promote growth—the Government’s priority and my priority—and the Prime Minister and I will shortly be announcing details of that package.

Harriet Harman: I thank the Deputy Prime Minister for his statement. We share his disappointment at the lack of progress on reform of the House of Lords as it cannot be right that in the 21st century we have an unelected Chamber making decisions on the law of the land. I join him in thanking the Joint Committee of both Houses. Despite the cross-party talks, the White Paper and the draft Bill, issues remained that needed to be resolved, not least those to do with the powers of the new second Chamber, the electoral process and a referendum. We should have been able to make progress and we share his disappointment on the stalling of Lords reform; it is unfinished business and we should return to it.
	Will the Deputy Prime Minister give the House some clarity on an issue that he has linked with Lords reform—that is, the question of changes to parliamentary boundaries? On 6 August, he made a clear link between Lords reform and the boundaries. He said:
	“Lords reform and boundaries are…part of a package of overall political reform. Delivering one but not the other would create an imbalance—not just in the Coalition Agreement, but also in our political system.”
	He said that because of the stalling of Lords reform, he decided to press the “pause button” on the boundary changes. He stated:
	“Coalition works on mutual respect; it is a reciprocal arrangement, a two-way street. So I have told the Prime Minister that…I will be instructing my party to oppose”
	the boundary changes. As he has made it clear that he will not allow the boundary changes to proceed, is it not pointless and costly to allow the Boundary Commission to carry on with its work for a further 14 months?
	Is it not right for Parliament to revisit the issue now? Will the Deputy Prime Minister look for an early opportunity for the House to express its view that the boundary changes should not go ahead? We assure him of our support for that. Will he turn his words of 6 August into action? The ball is in his court. Will he assure the House that we at least have a Deputy Prime Minister who is a man, not a mouse?

Nicholas Clegg: I thank the right hon. and learned Lady for her questions and I am sorry to hear that she has an early autumn sore throat to battle with. She gets 10 out of 10 for spectacular insincerity, nevertheless. The Labour party used to campaign against privilege and patronage. The Labour party used to say that it was the party of the people. The Labour party used to believe that the second Chamber should be abolished altogether. Yet when push came to shove, what did it do? It—[ Interruption. ]

Mr Speaker: Order. Mr Lucas, I thought you were auditioning to be a statesman but I am starting to have second thoughts. Calm yourself, man. We have only just come back and there are many long evenings ahead. I want to hear the Deputy Prime Minister.

Nicholas Clegg: Of course the Labour party does not like to be reminded that it has been converted from a party of the people to a party of the peerage. What did Labour Members do when they had the opportunity? They voted for the idea of reform but not for the means to deliver it. They delivered lofty speeches about the need to give the people a say about how to elect the legislators in the other place, but they would not even tell us how many days they wanted in the timetable motion to make that lofty rhetoric a reality.
	I think the history books will judge the Labour party very unkindly indeed. When they had the opportunity to translate the great work of Robin Cook and of the right hon. Member for Blackburn into reality and finally had it within their grasp to be the friends of reform, they turned into miserable little party point-scoring politicians instead.

Malcolm Rifkind: The Deputy Prime Minister will be aware that his noble Friend Lord Steel has introduced an alternative reform of the House of Lords measure that commands wide support in the other House as well as in this House. As the right hon. Gentleman will be aware, that measure would remove the hereditary peers, impose a retirement requirement, thereby bringing down the size of the other House, and ensure that those who have been convicted of offences cannot continue to sit in that legislature. Will he give some indication of whether the Government would support that proposal? Otherwise, he will throw away an important and serious opportunity to modernise the upper House. It might not be what he would ideally wish, but it is all he is likely to get.

Nicholas Clegg: I would like to correct the right hon. and learned Gentleman on one point: the Steel Bill would not remove hereditary peers. It would do three things, to be precise. It would extend the, in effect, voluntary retirement scheme that is in place in the other place, which I think has led to the spectacular result of two of its Members choosing to do that. Having seen the coverage of the views of some Members of the other place who are from my party, I can think of one or two whom I hope would take early retirement, but there would not be a mass cull in the way that the right hon. and learned Gentleman implies.
	Another provision relates to crooks, but let us remember that that means future, not existing, crooks, who would—hey presto!—not be allowed to sit in the other Chamber. Also, any peer who did not attend once, not even for a
	few minutes to sign on for their £300 tax-free daily allowance, would be disallowed. I am afraid that any scrutiny of that Bill shows that it would barely trim at the margins the size of the House of Lords, so by its own reckoning it would not do what it purports it would do, which is dramatically to reduce the size of the House of Lords. While I have a great deal of respect for the considerable time and effort that Lord Steel has put into this, my view remains that there is no surrogate for democracy.

Jack Straw: Does the Deputy Prime Minister not recognise that his relying on timetabling problems will be seen as a tawdry excuse for a lamentable failure of political will? To my certain knowledge, because I handled such Bills, plenty of controversial constitutional Bills, not least in the first Labour Administration, were not subject to timetabling at all. Such Bills can be got through the House, as this Bill could have been, either by informal agreement or, if necessary, by subsequent guillotining. If he had any courage, that is what he should have done with this measure.

Nicholas Clegg: Not only did I have the courage, but I had the courtesy to speak to the leader of the right hon. Gentleman’s party and ask a simple question: if there were objections from the official Opposition to a timetable motion, or even the concept of a timetable motion, how many days would they want? We were prepared to offer more days.
	As the right hon. Member for Blackburn knows, under the Labour Government, time and again Bills of constitutional importance were timetabled, and for good reasons. Members in all parts of the House rightly said that at a time of severe economic distress they wanted us to get on with the House of Lords Bill, but for the Bill not to consume all available parliamentary time. What answer did I get, both publicly and privately? That the Labour party wanted individual closure motions.
	I am not as much of an old hand in parliamentary procedure as is the right hon. Gentleman, but he knows just as well as I do that that would have led us into a morass and the thing would have been dragged out for months. That once again showed the skin-deep sincerity of the Labour party’s commitment to reform, and it is a great betrayal of his great work in the previous Administration that his party is becoming a regressive roadblock to political reform.

Bernard Jenkin: My right hon. Friend should comfort himself: he gave it his best shot, with all his sincerity, and we respect him for that. May I draw his attention to the fact that the Parliamentary Voting System and Constituencies Act 2011 remains in force? Therefore, the boundary commissions remain under a duty to make proposals on a House of 600 Members. Does he have the power to instruct them to stop? No, he does not. Is he therefore not simply going to obstruct a constitutional process for his own party political advantage, which is a disgrace?

Nicholas Clegg: The hon. Gentleman seems to be delivering answers to his own questions, so I might be redundant in this, but he is correct that, unlike on House of Lords reform, where we had a commitment to deliver legislation, and indeed elections, come 2015,
	in the coalition agreement we are sticking to retaining legislation on boundaries, for which, by the way, as I know he is meticulous about such things, there was no timetable stipulated in the agreement. On boundaries, we are, I suppose, strictly speaking, adhering to the coalition agreement, unlike on Lords reform—
	[Interruption.]
	The hon. Gentleman wants a detailed answer and I am giving it to him. There is little else going on this first afternoon back at Parliament.
	The hon. Gentleman is right to say that, because the primary legislation is still on the statute book, there is nothing in my power to stop the work of the boundary commissions, but I have made it clear that, since I think I reasonably believe that the constitutional reform package was exactly that—a package—and since this is the first time that either of the coalition parties has been unable to deliver on a major coalition agreement commitment, it is therefore right to rebalance things and not to proceed with an unbalanced package.

David Blunkett: Substantial reform of the House of Lords, way beyond that proposed in the Steel Bill, could have been possible with 100% agreement across the House, had the Deputy Prime Minister chosen to take that route. I ask him this simple question: as the boundary changes have been linked to dropping the House of Lords Reform Bill, will Ministers under Liberal Democrat auspices—his Ministers—be asked to abstain or vote against boundary changes?

Nicholas Clegg: I have made it very clear that all Liberal Democrats, whether Front Bench or Back Bench, will vote against the changes coming into effect before 2015. On the right hon. Gentleman’s first point, I wonder whether he could advise the House on what more the Government could have done to seek to understand what a cross-party approach would be. We convened cross-party discussions on seven occasions when the coalition Government were first formed. We published a White Paper and a draft Bill. We convened a Joint Committee, allowed it to continue its work for months and months, and adopted the vast majority of its recommendations. We chopped and changed our legislative text, taking on board suggestions from Opposition and Government Members. For the right hon. Gentleman to say that that was a capricious exercise unilaterally conducted by the Government ignores the painstaking work put in by the Minister with responsibility for political and constitutional reform, my hon. Friend the Member for Forest of Dean (Mr Harper), me and many others to try to generate proper cross-party support for this now long overdue measure.

Alan Beith: Now that Labour’s refusal to co-operate on a timetable has ensured that we will see a steady increase in the number of unelected legislators, may I assure my right hon. Friend that he was very wise not to invite my hon. Friends and me to support a reduction in the number of elected legislators?

Nicholas Clegg: As my right hon. Friend suggests, of course there is an argument that says that if one reduces the size of one Chamber—the House of
	Commons—but does not make the other more legitimate, all one ends up doing is strengthening the hand of an already over-mighty Executive. That argument has some force, but I have never hidden the fact that the reason why I believe that the boundary changes should not—and, indeed, will not—go ahead in 2015 is that the overall package of constitutional and political reform measures would otherwise be unacceptably unbalanced within the coalition Government.

David Winnick: Nearly all the Deputy Prime Minister’s party colleagues in the Lords oppose the measure; there is no doubt about their very strong opposition. Will he respond to the view that in time—in the next few months, or perhaps next year—the Prime Minister will persuade him to vote for the boundary changes? Is that a possibility?

Nicholas Clegg: This statement is about the Lords, but the answer to the hon. Gentleman’s question on boundary changes is simple. I have said very clearly what we will do: we will vote against the boundary changes coming into effect in 2015. The legislation will continue, after 2015, as it is on the statute book, unless it is changed. I have been very clear about that, and nothing will change my mind.
	As for House of Lords reform, it has not happened this time; if it was easy, it would have happened at some point over the past 100 years. I say this to Labour Members, who seem to be enjoying their time in opposition, in which they are taking responsibility for absolutely nothing and delivering on none of their commitments to political reform: one day, one generation of politicians will finally have to introduce a smidgen of democracy in the second Chamber. We in this country and this Parliament cannot continue trotting around the world lecturing other countries on the virtues of democracy while not introducing it in Westminster.

Eleanor Laing: The right hon. Gentleman is right: it is a great pity that we have not made progress in modernising our system. It could have been done, as the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) has just said. The Deputy Prime Minister has confirmed that on 6 August, he said that, the House of Lords Reform Bill having been withdrawn, his party would no longer support the boundaries legislation. Does he recall that on 19 April, in answer to my questions, he told the Select Committee on Political and Constitutional Reform that there was “no link” between the two issues? Does he accept that he cannot have been telling the truth on both occasions?

Nicholas Clegg: Since we are trading quotes, I remind the hon. Lady that she—[Interruption.] I will answer the question. She said on her website that we should not be wasting our time on constitutional reform—of almost any description, I think—that is not going to improve the life of a single person in the United Kingdom. I have the transcript of the meeting of the Select Committee in April this year. As she knows, I also said in my exchange with her that we were
	“trying to press forward”
	on all the issues in our constitutional and political reform package, and that
	“I think we are successfully doing so—in keeping with the commitments we both made, both coalition parties, in the Coalition Agreement.”
	I made it clear, therefore, that this was an overall approach to a package of measures which we had both entered into solemnly in the coalition agreement. Most people in the country would think it perfectly reasonable that when one party to such an agreement decides to pick and choose the measures that it will support, it is right for the other party to say, “Well, in that case we will need to pick and choose a bit ourselves so that we can continue with the rest of the very important work that this coalition Government are doing.”

Ben Bradshaw: Why does the right hon. Gentleman not just admit that it is obvious from their response today that his new friends in the Tory party have never been serious about Lords reform, and that on this, as on the alternative vote referendum, he has been badly let down by his friend the Prime Minister? Why did he not offer a referendum, which may have eased the passage of the Bill through both Houses?

Nicholas Clegg: I did suggest, in the latter stages of the discussions within the Government, that we should hold a referendum on election day in return for delaying both the first elections to the House of Lords to 2020 and the first boundary changes coming into effect in 2020, but that was not a position that found favour with my coalition partners on this occasion. The hon. Gentleman points a finger at Conservative Members about their commitment to political and constitutional reform, yet Labour has in many respects been a whole lot more cynical and insincere, claiming that Labour Members are fervent supporters of House of Lords reform and, as I explained earlier, refusing to will the means and talking only about the ends.

Several hon. Members: rose —

Mr Speaker: Order. I gently point out to colleagues that large numbers of them wish to contribute and I wish to accommodate them. Brevity would assist us in that mission, and we will be led in it by Sir Tony Baldry.

Tony Baldry: Why does the Deputy Prime Minister not believe that those who make the laws should be elected by constituencies of approximately equal numbers of electors? By the time of the next general election, my constituency will be approximately 90,000 electors. I love them all dearly and I am very proud to represent them all, but what possible justification can there be for a number of constituencies in this House to have 90,000 or more electors, and a number of Members of this House to represent 60,000 or fewer constituents? How is that fair? It is just as much gerrymandering as happened before the Great Reform Bill.

Nicholas Clegg: The hon. Gentleman’s public profession of love for all his 90,000 constituents must explain why he is such a well respected Member of this House and such a popular constituency Member. My answer is simple. I was and remain entirely supportive of the idea that we reform the House of Lords and also introduce boundary changes to this House. That is what was in the coalition agreement and that is what I was
	prepared to deliver and remain prepared to deliver. What I am not prepared to do, because I do not think coalition government can work like that, is to enter into a sort of arbitrary pick-and-choose process where one party baulks at something and the other party must none the less vote for things which are not very appetising or popular with that party. That is simply no way to run a coalition. On the substance, the hon. Gentleman is right. I remain still to this day prepared to support and vote for both, but in a coalition Government I am not prepared to allow things to collapse into a pick-and-mix approach.

Dennis Skinner: Well, every cloud has a silver lining. The House of Lords survives, and when the Liberal Democrats dump the right hon. Gentleman as their leader, he will qualify for a peerage. Will he take it?

Nicholas Clegg: I knew the question was going to be a nice one. No, I will not. [Interruption.] Let me explain. First, I do not think I would be very welcome in the current House of Lords, given my somewhat undiplomatic descriptions of the illegitimacy of that House. Secondly, I personally will not take up a place in an unreformed House of Lords. Call me old-fashioned—it just sticks in the throat. I have campaigned all my life, and my party has campaigned for decades now, for the simple idea of democracy, and that is what I will continue to do.

Martin Vickers: As one of the Government Members who favour an elected upper House, may I express my regret at the Government’s decision? The Deputy Prime Minister spoke of inching forward. Although we will obviously now have to wait until a future Parliament for legislation, I urge him to consider some means of inching forward by way of discussions and so on in this Parliament.

Nicholas Clegg: To be frank, I do not want to hold out to my hon. Friend and other reformers a great deal of hope that we will make progress, even by inches, during the remainder of this Parliament. We have taken the process a considerable distance and I do not think that those of us who are clearly disappointed that we were unable to cross the finishing line during this Parliament—I have always been very grateful for his support for the idea of democratic reform of the other place—should ignore the importance of a very significant majority on Second Reading in favour of a Bill that set out specific provisions for reforming the other place. It was just because of a reluctance to translate that blueprint into something that was legislatively workable that we cannot proceed. I do not think that I or the Government would have been forgiven, whatever one’s views on this, if we had decided, as the right hon. Member for Blackburn has suggested, to soldier on valiantly for months and months, getting into the trenches on this, when there are so many other things to be getting on with. The Prime Minister and I will make some announcements shortly on how we will use the opportunity of an unexpected gap in the legislative timetable to push forward measures that will help to create growth and jobs in our economy.

Fiona Mactaggart: It would normally be the Deputy Prime Minister’s job to bring forward the revised boundary changes to this House. If he is not going to do it, who is?

Nicholas Clegg: As I have explained, the primary legislation is as it is, and no one is proposing that we repeal it. My own view—I have made this perfectly public—is that it would be better not to complete the outstanding stages of the Boundary Commission investigations because the end result is now a foregone conclusion, but if that is what is felt necessary then a vote will be held and the boundary changes will not go through before 2015.

Jacob Rees-Mogg: May I commend the Deputy Prime Minister on his remarkable statesmanship with regard to the boundary changes? He will be pleased to know that the commission was proposing a North East Somerset that would have been a safe Lib Dem seat, so I am in with a sporting chance of being back after the next election. However, now that he has said that Lib Dem Ministers will vote against Government policy, I wonder what his definition of collective responsibility is within a coalition Government.

Nicholas Clegg: The hon. Gentleman’s description of the psephological effects in his neck of the woods is the closest anyone has come to possibly changing my mind on the boundary issue, but I will not, and I have made our position very clear. There are conventions, and in time-honoured fashion they mutate and develop over time. Coalition government is clearly a novel thing, and I think that the conventions that govern government will need to adapt to the fact that in this instance the coalition parties will go their separate ways, and I am sure that we will be able to manage that.

Helen Goodman: The Deputy Prime Minister has just said, in response to my right hon. Friend the Member for Exeter (Mr Bradshaw), that he could not persuade the Prime Minister to have a referendum on the package. Will he share with Members the reasons the Prime Minister gave?

Nicholas Clegg: No, I will not go into the conversation, but it was clearly felt that the approach of having a referendum on election day with a deferral for both the first elections to a reformed House of Lords and the entry into effect of the boundary changes was not sufficient to persuade those who had made it clear that they would not under pretty much any circumstances back a timetable motion for House of Lords reform legislation.

Simon Hughes: Is it not a fair summary of the position to say that the Bill has to be withdrawn because, although both coalition parties clearly signed up to delivering it, at the end of July there was an unholy alliance between Conservatives opposed to an elected second Chamber and the Labour party, which says that it is in favour, but absolutely refused to deliver the meat? Is that not the reason? There was therefore no other option in this Parliament. But we will come back to the issue—and in the end, the progressives will win.

Nicholas Clegg: That was a fair description of the politics inside the Chamber, but my right hon. Friend’s last point is more important. If anyone really thinks that we can duck these issues for ever—that the House of Lords can carry on growing in size or that, in the 21st century, it is comprehensible to the British people that Members in the other place should be able to craft the laws of the land, getting £300 tax-free every day just for turning up—they should think again.

Mike Gapes: The Deputy Prime Minister will know that the Boundary Commission for England is due to publish revised proposals in the middle of October. What is the point of that and how much will it cost?

Nicholas Clegg: I have answered that question several times.

Peter Bone: The Deputy Prime Minister should be congratulated on his total honesty for saying that a pick-and-mix coalition is a waste of time. As we now have a pick-and-mix coalition, when will he and his colleagues cross to the Opposition Benches?

Nicholas Clegg: It is always reassuring to get the hon. Gentleman’s traditional welcome at the beginning of the parliamentary term. I thank him for his supportive remarks about all that my colleagues and I are doing in government to rescue, reform and repair the British economy, which was left in such a state of disrepair by the Labour party.
	We are two and a half years into a five-year Government. The Prime Minister and I will make some announcements shortly—for instance, on the all-important issue of increasing the number of homes built in this country, to improve provision of affordable and social housing for people who desperately want to get on the housing ladder. If the hon. Gentleman does not mind, that is the kind of work that I am going to concentrate on.

Luciana Berger: What estimate has the Deputy Prime Minister made of the cost to our civil service in time and effort of drawing up his now defunct House of Lords Reform Bill?

Nicholas Clegg: As the hon. Lady knows, a lot of ink, paper and official time has been consumed, not just by this Parliament and Government but by previous Governments and Ministers who have sought finally to crack the conundrum of how we introduce more democracy to the House of Lords. The hon. Lady is right: if she and her colleagues had decided to back us on the timetable motion, all that ink and paper would not have gone to waste.

Anne Main: What message does the Deputy Prime Minister think it sends to the public when he votes in favour in principle of boundary changes but then, when he does not get what he wants, he throws his toys out of the pram and rejects the whole thing?

Nicholas Clegg: With the greatest respect to the hon. Lady, I feel slightly as though we are looking at the matter from opposite ends of the telescope. The
	problem has arisen because of the refusal of her colleagues and others to will the means to deliver something to which she is committed, under not only the coalition agreement but successive Conservative manifestos. I have been looking at the long pedigree of commitments in favour of an elected element in the House of Lords in Conservative party manifestos going back to 2001. Interestingly, the 2005 Conservative manifesto states that
	“proper reform of the House of Lords has been repeatedly promised but never delivered.”
	That sounds more like a prediction than anything else.

Angus MacNeil: This latest episode of omnishambles shows the public that Westminster is unreformable. Twentieth-century democracy has patently failed. Does the Deputy Prime Minister understand that this is yet another example of why, in the 21st century, Scotland would be better off making all its own decisions with independence rather than continuing under the cronyism in the House of Lords?

Nicholas Clegg: I agree with the hon. Gentleman that one of the virtues of a reformed House of Lords would have been a voice in the second Chamber for the Scottish people as well as for the English and Welsh people and for all the nations and regions of the United Kingdom; we have spoken about that before. At the moment, that second Chamber has a very high preponderance of people from the south-east of England. There is chronic under-representation, not only from Scotland but from Wales and the north of England. That would all have been balanced by reform. I do not think that that point argues in favour of ripping up the United Kingdom altogether, but it does argue in favour of pushing for reform once again in the future.

Richard Shepherd: The Deputy Prime Minister refers to his proposals as a simple matter of democracy. I wonder how he reconciles that with the greater principle of how it can be democratic to have a once-elected person who is never held accountable by an electorate.

Nicholas Clegg: We had extensive debates, in which the hon. Gentleman participated, when the Government set out our ideas in the draft Bill about the concept of a non-renewable term. I totally accept that there is an issue about legitimacy versus accountability. A non-renewable term improves legitimacy, but not standing for election again raises question marks about accountability. I would say two things. First, a 15-year term is better than an illegitimate life membership of the House of Lords. Secondly, we did not draw on something that this Government have suddenly invented; we drew on the work of countless cross-party committees in the past—the Cunningham work, the Wakeham work, and so on. Those all came up with the same conclusion—that if we were going to create a clear distinction between this House and a reformed upper House, and to make it absolutely clear that the legitimacy and accountability of this place was supreme, then the best way of doing that was, yes, to introduce democracy, but to do so on the basis of long, non-renewable terms.

Denis MacShane: I have some sympathy for the Deputy Prime Minister, because in our parliamentary history there are constitutional moments, but this is not one of them. I do believe, though, that the Liberal Democrats will be able to get House of Lords reform through when they go into the Lobby with the majority Labour Government after the next election. In the meantime, is it really a good use of public money—taxpayers’ money—to keep this extraordinary boundary change operation going? He has a duty of care to the taxpayer. He should finish it now.

Nicholas Clegg: I find it almost touching that the right hon. Gentleman thinks that his party has any credibility whatsoever left on political reform. Labour did not introduce democracy in the House of Lords during 13 years. An opportunity was delivered to the Labour party on a silver platter—[ Interruption. ] I am perfectly calm, but I am seeking to make myself heard, because I am not sure whether the right hon. Gentleman is listening. Given that the Labour party did not reform the bastion of privilege and patronage at the other end of the corridor—that it did nothing in 13 years to introduce democracy into the House of Lords—why on earth does he think that anyone believes that it will do so in the future?

Stewart Jackson: I find the Deputy Prime Minister’s apologia at best confusing and possibly disingenuous in that he will know that the coalition agreement did not specifically call for primary legislation on House of Lords reform but for a settled cross-party consensus to be reached. We tried to do that and could not, but that consensus could have been formed around the Bill put forward by Lord Steel of Aikwood. On that basis, why has the Deputy Prime Minister chosen to resile from a solemn agreement to support fair and democratic boundaries?

Nicholas Clegg: As far as I can remember, I have not sought to make any apology over the past 45 minutes. I feel that the Government have acted in good faith to try to generate cross-party support for a reasonable set of proposals drawing on a lot of work from other members of other parties over several years. It is a great pity that the hon. Gentleman and other colleagues felt that it was not possible to get behind that reasonable package of proposals with a timetable motion. The coalition agreement said that this Government were going to come forward with proposals to reform the House of Lords. We are not a think-tank. The Government do not talk about proposals just to float them idly in a newspaper article and then do nothing about them. If one is going to propose something as a Government, one proposes it with a view to actually doing something.

John Spellar: The Deputy Prime Minister has been ducking and diving on the question of the Boundary Commission review. Is he aware that the Boundary Commission has today written to all Members of Parliament saying that it proposes to publish its revised proposals on 16 October? That will involve a huge amount of expense. Why does he not shut this exercise down and save a shed-load of money?

Nicholas Clegg: Because, as I have explained, the primary legislation remains in place, and—this is not rocket science—there is clearly no agreement between the Conservative and Liberal Democrat parties in the coalition Government to repeal that primary legislation, so it stands. I happen to agree with the right hon. Gentleman that, given that the result of the final vote is a foregone conclusion, we might as well not push the issue to a vote; but, perfectly understandably, other members of the Government want to do so. I have made it crystal clear what my position and that of my Liberal Democrat colleagues will be when that vote occurs.

Greg Mulholland: I commend my right hon. Friend on his robust stance on the boundary changes. I was delighted by that and remind him that a not inconsiderable number of Conservative Members were also delighted by his announcement. In light of his dignified and statesman-like statement accepting that House of Lords reform will not happen, is it not time for the Prime Minister to follow suit and make a similarly dignified statement to say that he accepts that the boundary changes will not happen, because they will not?

Nicholas Clegg: I am at risk of carbon-copying my previous answers. The legislation on boundary reviews stands, so the process continues. It is not in my power to stop that without reversing the primary legislation altogether. When and if the matter comes to a vote, I have made it clear what the voting intentions of the Members of my party within the coalition Government will be.

Joan Walley: It is clear that the Deputy Prime Minister has linked everything about House of Lords reform to the Boundary Commission’s proposed changes. Every MP has received today a letter dated 3 September about the proposed changes coming in for consultation on 15 or 16 October. Does that not bring Parliament into disrepute? He has said that there is a gap in the legislative programme and that we will hear further announcements. Why cannot he and his Conservative colleagues introduce a Bill to get rid of the proposed parliamentary boundary changes?

Nicholas Clegg: Because, self-evidently, as I have answered previously, there is no agreement within Government to repeal that primary legislation. The hon. Lady can wave as many letters as she likes at me, and I am terribly sorry that she is upset about what appeared in her mailbag this morning, but that is the situation. I have been entirely open about it and I agree with her that what will happen at the end of the process is pretty much a foregone conclusion, because of what I have said about how Liberal Democrat Ministers and MPs will vote when the time comes.

Craig Whittaker: Following the recent vote on House of Lords reform, one Conservative member of the Government resigned and another was sacked for voting against the Government. In light of the fact that the right hon. Gentleman has instructed his party to vote against the boundary review, will he also instruct members from his party to resign from the Government?

Nicholas Clegg: I remind the hon. Gentleman that the timetable motion for the House of Lords Reform Bill was not even been put to a vote, so Conservative MPs, whether they be Front Benchers or Back Benchers, were not asked to choose which Lobby they would go through. If we really want to draw a parallel, I have some sympathy with the argument that says let us draw stumps and not vote on either the timetable motion for the House of Lords Reform Bill or on the result of the Boundary Commission’s work.

Diana Johnson: The Deputy Prime Minister has failed to change the voting system and failed to change the House of Lords. Will he tell the House what constitutional change he is turning his eye to in the remaining half of this Parliament?

Nicholas Clegg: As the hon. Lady knows, there are issues to do with the recall of MPs who are guilty of wrongdoing; there are ongoing cross-party talks on party funding; and we are committed to taking measures to tighten up lobbying activity and make it more transparent. Those are all important issues and I hope that she will not lightly dismiss the progress that we will seek to make on them. There is also a bigger quasi-constitutional issue, namely: how do we, as we rebuild our shattered economy—which, in my view, suffered from excessive over-centralisation in the way in which economic decisions were taken in the past—also breathe life into local communities and local authorities so that they can play a role in rebuilding and rebalancing our over-centralised British economy?

David Tredinnick: Surely it would be better for my right hon. Friend’s reputation if he accepted the Steel Bill, which has widespread support in the Lords, and maybe made some modest amendments to it.

Nicholas Clegg: As I sought to explain earlier, the Steel Bill would do three things. It would stop future crooks from sitting in the House of Lords; it would stop people who had never turned up to the House of Lords from sitting, but pretty well all of them turn up at one point or another; and it would offer voluntary retirement, which so far has not been taken up by more than two or three peers. If we look at the detail rather than declare that the Bill is a great alternative to an elected House of Lords, we see that it does not really stand up to scrutiny. It would not make much of a difference. Call me old-fashioned, but my view is that if we are going to reform the House of Lords, we should do it properly once and for all and ensure that it has democracy at its heart.

Jonathan Reynolds: Is the Deputy Prime Minister satisfied that the Prime Minister did everything he could to support the Bill? If so, why does he believe the Conservative party rebellion was so large?

Nicholas Clegg: Of course I am satisfied that the Prime Minister did all he could. This happens in politics, but thankfully our political parties are not North Korean political parties that jump when their leaders say jump. I should know that as well as anybody after this weekend’s press coverage.
	This debate divides opinion and provokes strong reactions in people. In this instance, as the Prime Minister has said, he sought to persuade Members of his own party, but the commitment that he and I made to having the first elections take place in 2015 proved not to be possible. What we have done is perfectly sensible, and it happens from time to time in politics. We have drawn a line under that issue and the boundaries issue, and we will move on with the many important matters, particularly economic ones, that we must now tackle.

Nadhim Zahawi: The Deputy Prime Minister talks about the shortcomings of the Steel Bill, but he also speaks passionately about the unwieldy number of Lords, about patronage and about all the other things that we can get on and reform now. I implore him to produce a short Bill to get on with those reforms, building on Lord Steel’s Bill. Or is he just an all-or-nothing man?

Nicholas Clegg: As I have said, I suspect that if the situation was quite as straightforward as the hon. Gentleman feels, reformers in the past and over the past couple of years would have reached the eureka moment. As I explained, the Steel Bill would make only a tiny difference to the size of the House of Lords. As the debates over the past several months have proved, anything more substantial appears to be too controversial right now. That is why we have rightly said that the Government are now going to focus on the things that people want us to focus on, as I believe he has urged me to do in the past. We want to ensure that we create circumstances in which growth and an increase in jobs take root in our economy.

William Bain: The Library has confirmed to me this afternoon that this wretched boundary review will lead to the wasting of £11.9 million of taxpayers’ money. Why has the Deputy Prime Minister been so hasty in rejecting the Opposition’s offer to support a Bill repealing the Parliamentary Voting System and Constituencies Act 2011 and ending this farcical process once and for all?

Nicholas Clegg: I have heard promises from the Opposition before about support for constitutional and political reform, and look where that got me.
	I have set out the position clearly. The Act remains on the statute book, and it will not be repealed because there is no coalition Government agreement to do so. I have been clear about how I and my Liberal Democrat colleagues will vote when and if a vote is brought to the Floor of the House.

Andrew Bridgen: We have heard that the Deputy Prime Minister has gone on the record first as stating that boundary changes and Lords reform were not linked, and then as changing his mind and saying that they were. If the electorate had delivered a yes vote in the alternative vote referendum instead of a resounding and unequivocal no, would boundary changes and Lords reform be linked today?

Nicholas Clegg: The whole agenda of political and constitutional reform had a number of principal components as set out in the coalition agreement. Frankly, the way in which some of those measures were
	legislatively arranged is not really the point. The point is that it was clear that it was a broad agenda whose main components would be pursued by both parties in the coalition. For reasons that I will not rehearse again, that has proved not to be possible, so we have made an adjustment to that package. We will proceed with its other elements, and I hope we will have some success on party funding and make progress on recall and on regulating lobbying. Much more importantly, we will now have legislative time available to make progress on the economy, too.

Ann Coffey: A powerful argument in favour of House of Lords reform was that, if the current level of patronage continues, the membership of the unelected Chamber will be more than 1,000 by 2015. I hear what the Deputy Prime Minister says about the limitations of the Steel Bill, but does he not think that there is some merit in bringing forward a proposal to cap the membership of the House of Lords at that of the House of Commons? At least that would be some progress.

Nicholas Clegg: If one did that, one would hard-wire party political imbalance into the House of Lords, and that would not be acceptable without allowing the British people any say in its composition. There has clearly been a setback for people such as the hon. Lady, who believes in and has been articulate in her advocacy of democratic reform of the House of Lords. However, I do not think that it is the end of the story. The current trajectory of the House of Lords, even if the Lord Steel Bill were introduced, is impractical and unsustainable. I hope that, if not now, then in the next few years, we can return to the matter and both reduce the size of the House of Lords and make it more legitimate.

Lorely Burt: Is my right hon. Friend aware of a recent quote from Lord Prescott, who said:
	“The House of Lords is a bit like a job centre, you have to go down there to get paid expenses, and it just gets totally tiring”?
	Is not it a shame that we have been unable to help the noble Lord out of his and our misery?

Nicholas Clegg: No wonder he wants to be a police and crime commissioner, given all the hard work that he clearly puts into the House of Lords. It is one of my many regrets that we have not been able to make progress on the matter, and that I have been unable to put Lord Prescott out of his misery in the House of Lords.

Ian Lucas: Will the Deputy Prime Minister support an amendment to the Electoral Registration and Administration Bill, calling a halt to the boundary review?

Nicholas Clegg: I have set out my position 100 times already in the past hour.

Tom Brake: Will the Deputy Prime Minister speculate on how history will view Members of all parties of this House and the other place who overtly or covertly manoeuvred to block the reform of the House of Lords?

Nicholas Clegg: Badly, I think, because if we in the coalition Government had been dogmatic about the Bill’s content, the critics of our approach would have had a point, but we were extraordinarily pragmatic and flexible, making a barrage of changes to the measure to try to secure cross-party support. The Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper) and I clearly signalled on Second Reading that we were prepared to change the Bill further to make it more acceptable to as many people as possible in all parties, as long we retained the principle, in some shape or form, that the British people, not party leaders, would have a say in who on earth actually sits in the House of Lords. Although we were rigid about the principle, we were pragmatic about the details, and that is why I regret, given our pragmatic approach, that we were unable to build on that to create a cross-party approach to the matter.

John Baron: The Deputy Prime Minister has said that he will not take his seat in the House of Lords when the time comes. Will his party continue to make nominations to the House of Lords?

Nicholas Clegg: Yes, of course. Just because the reforms have not been implemented, it does not mean that we will turn our back on the real world. The system is as it is, at least for a while longer, and we will continue to operate in it. I would be delighted to take my place in a reformed and more democratic House of Lords, but, as I said, I suspect that I am not wholly welcome in its current configuration.

Mr Speaker: Patience rewarded. I call Dr Julian Lewis.

Julian Lewis: Thank you, Mr Speaker. The spectacle of Cabinet Ministers voting against a major Government Bill without resigning their positions will surely bring collective Cabinet responsibility into total disrepute. Given that the Deputy Prime Minister believes in making progress by inches, will he not support a single, simple, one-line Bill to allow the exclusion from the upper House of people who have been convicted of serious criminal offences?

Nicholas Clegg: As I said before, that barely scratches the surface of the issues that exist in the House of Lords. On the first point, the failure of collective responsibility is a political one in which one party in the coalition Government has not honoured the commitments set out in the coalition agreement to proceed with reform of the House of Lords. Let me be clear—[ Interruption. ] If I can make myself heard, let me be clear: I have asked Liberal Democrat Members countless times to vote for things to which they strongly object, because they were in the coalition agreement. The hon. Gentleman cannot reasonably ask me to ask Liberal Democrat MPs to continue as if nothing has happened, when the other side of the coalition chooses not to do so on an issue as important as reform of the House of Lords. That is coalition politics, and it will continue until one party—the hon. Gentleman’s party or another—wins an outright majority. That did not happen in the previous election; that is why we have a coalition, and the country is better for it.

Mr Speaker: I am grateful to the Deputy Prime Minister and to colleagues.

Syria

William Hague: With permission, Mr Speaker, I will make a statement on Syria.
	More than 20,000 people have now died in the conflict in Syria, up to 1.5 million are internally displaced, and 230,000 have fled to Lebanon, Iraq, Turkey and Jordan. According to the UN, 2.5 million people in Syria need urgent humanitarian assistance—double the number in March—and fewer than half of Syrian primary health care facilities and hospitals are now fully functional. The regime is using indiscriminate shelling, aircraft, helicopter gunships and militias to terrorise civilians. There are reports of up to 400 people slaughtered in a single atrocity in the town of Darayya.
	Our objective remains an end to the violence and a transition to a more democratic and stable Syria. That is the only way to avoid protracted civil war, the collapse of the Syrian state, an even greater exodus of refugees, and further appalling loss of life. That is not just our view or the view of other western countries; it is the view of the Arab League and the vast majority of UN member states, and I particularly welcome the recent strong statement by President Morsi of Egypt condemning the Assad regime’s actions.
	Despite our best efforts, the United Nations Security Council has been unable to put its full weight and authority behind a peaceful resolution of the crisis. On three occasions we have tried with our partners to adopt a Security Council resolution that would require the regime to begin a political transition, rather than simply call on it to do so. On each occasion, Russia and China have used their vetoes, most recently on 19 July. It is a terrible indictment of the Council that approximately a quarter of all those who have been killed in Syria died in the month following the last vetoed resolution.
	We continue to urge Russia and China to work with us to end the crisis and to allow the Security Council to live up to its responsibilities—a case the Prime Minister made to President Putin during August, and a case I made again at the Security Council in New York last week. We are also working closely with the new UN and Arab League special representative, Mr Lakhdar Brahimi, whom I met in New York last week as well.
	In the absence of that international unity, however, we have sharply increased our work to help the people of Syria in five areas: helping to create the conditions for a political transition; providing further humanitarian aid; increasing the pressure on the regime; supporting justice for victims of human rights violations; and planning assistance to a future Syrian Government. In each case our actions are carefully co-ordinated with our partners, and I organised a conference call in mid-August with Secretary Clinton and the Foreign Ministers of France, Germany and Turkey to ensure that that is the case.
	Briefly, I will take each of those five areas in turn. First, a political transition requires the Assad regime to stop the violence, but it also requires Syria’s opposition groups to win the trust of the Syrian people and provide a united and viable political alternative. We are therefore greatly increasing our work with opposition groups and political activists in Syria. The UK’s special representative
	to the Syrian opposition continues to meet opposition groups in the region, and last month I authorised his first limited contacts with political representatives of the Free Syrian army outside the country.
	On 10 August, I announced an extra £5 million in non-lethal practical assistance to help protect unarmed opposition groups and human rights activists in Syria, including communications equipment, training to support the documentation of human rights violations, and other equipment for civilians. Communications equipment is en route to Syria as I speak.
	We have already trained more than 60 activists in documenting human rights violations, and provided support, including equipment, for 100 Syrian citizen journalists to report on events in Syria. Activists who helped investigate the massacre in El-Houleh, for example, were trained by the United Kingdom. The new assistance I announced on 10 August is designed to support similar work and to help save lives. All the support we provide will be carefully targeted, co-ordinated with like-minded countries, consistent with our laws and values, and based on rigorous analysis and risk assessment.
	The second area is action to address the humanitarian crisis. The UK is the second largest bilateral donor to the Syrian people. Since July, our aid has provided food to more than 145,000 people, water and sanitation for up to 60,000 people, and health care for more than 50,000 people. In August, my right hon. Friend the Secretary of State for International Development announced a fourfold increase in UK assistance for Syrian refugees. At the UN Security Council last week, I announced a further increase in UK aid from £27.5 million to £30.5 million. It includes £2 million in new funding for medical aid inside Syria and £1 million for refugees in Jordan, particularly those who have been victims of sexual violence—a particular focus for our Government ahead of our G8 presidency next year.
	Both my right hon. Friend and I have visited the Jordanian border with Syria in recent weeks to meet refugees, and we have seen how the need is growing. As of last week, the $180 million UN humanitarian response plan was only half funded. There is an urgent need for other countries to help make up the shortfall. To that end, in New York I proposed, with the French Foreign Minister Laurent Fabius, that Development Ministers and UN agencies meet to help generate donations and co-ordinate assistance. Through the conflict pool, we are also increasing our bilateral support to the Government and armed forces of Lebanon as they grapple with insecurity caused by Syria’s conflict.
	Thirdly, the UK has been at the forefront of efforts to isolate the Assad regime and cut off its finance. We have led the way on 17 rounds of EU sanctions on Syria since last May, targeting 155 individuals and 55 entities close to the regime. Senior Syrian military officers and diplomats are joining senior members of the Government in courageously turning their back on Assad, including former Prime Minister Riad Hijab. At the UN Foreign Minister Fabius and I also called for others around Assad to follow Mr Hijab’s example and dissociate themselves from the regime.
	This leads into our fourth area of work—supporting justice for the Syrian people and helping to deter crimes. The UN Human Rights Council commission of inquiry has reported human rights violations on an appalling scale by the regime and its militia, and also abuses by
	some armed groups. A list of individuals and units believed to be responsible for human rights violations and abuses will be submitted by the commission at the end of this month, for the purposes of holding to account those responsible for atrocities. We strongly believe that the commission’s mandate should be extended so it can continue that vital work.
	We also support the initiative by the Swiss Government to build momentum for a referral of the situation in Syria to the International Criminal Court, and urge others to join these efforts. If these do not succeed, we look forward to a day when a different kind of government in place in Syria will take responsibility for voluntarily referring the situation to the ICC. The UK’s expert human rights monitoring mission visited the region earlier this year. We will continue to work to help improve the quality of information and evidence gathered by Syrian human rights activists which may be used in a future accountability process.
	Fifthly, Assad’s departure from power is inevitable. His regime is doomed, and the international community must plan rapid support to a new government in Syria now.
	Any such government will face a broad range of challenges, from reforming the security sector and restoring health and education services, to ensuring people have shelter, water and food. So FCO officials are working closely with the Department for International Development, the Ministry of Defence and the stabilisation unit, and also with key allies in the Friends of Syria including regional countries, so that we develop and co-ordinate plans for assistance now.
	This crisis began when the people of Syria demanded their legitimate rights and freedoms. The Assad regime has tried to crush their aspirations and extinguish their hope. We will use all diplomatic means available to us to help them, working with the UN, the Friends of Syria, the European Union, Arab countries and key allies such as France, the United States and Turkey. As I have said to the House before, we have not ruled out any options as this crisis deepens. At the UN General Assembly later this month, we will seek once again to generate the determined, concerted international action that the situation demands and that Syrian people have every right to expect.

Douglas Alexander: I thank the Foreign Secretary for his remarks and for prior sight of the statement.
	Since the House last debated the situation, the pace of the conflict unfolding in Syria has quickened and the situation on the ground worsened. It is impossible yet to quantify the scale of the tragedy, but already, as we heard from the Foreign Secretary, the figures are stark and the suffering immense. I welcome much that he set out for the House today, therefore, but does he accept that the situation in Syria continues to represent not only, of course, a terrible indictment of Assad’s brutality but a tragic failure by the international community? The longer the conflict continues, the greater the risk of a rise of jihadism on the one hand and indiscriminate sectarian violence on the other, making a sustainable
	resolution to the conflict even harder to achieve. Military action alone will not bring peace to this country, and the bloodshed will not stop unless there is a plan to build the peace as well as one to win the war.
	It is deeply to be regretted that the continuing division of the international community has meant that the UN has failed, time and time again, to take the necessary action. Since the House last debated the matter, Kofi Annan has resigned as special envoy, the UN observer mission’s mandate has expired and only today the man brought in to replace Mr Annan has described his mission as “nearly impossible”. But adversity cannot, and must not, be an excuse for inaction, so I welcome—on behalf of the whole House, I am sure—the fact that the Foreign Secretary has set out in his statement the vital and urgent support and relief that the UK is offering for the millions both within Syria and in the border regions.
	The number of internally displaced people inside Syria is 10 times greater than the number of refugees in neighbouring countries, but the appeal for assistance for those inside Syria is only 20% funded, and many non-governmental organisations argue that, compared with the appeal for refugees outside the country, the allocation for those in Syria is much less in proportion to the scale of the need. Will the Foreign Secretary set out the steps being taken to address this situation? Given the recent reports of French and Turkish thinking on this issue, what assessment have the British Government made of the viability of buffer zones within Syria to protect fleeing civilians, and will he make clear the Government’s position on this, given that apparently no agreement was reached on it at last week’s UN Security Council meeting?
	Alongside steps to relieve the immediate crisis, we share the Government’s view that work must be done to improve Syria’s future prospects, but given that Syria has now descended into full-blown civil war, it is vital that the Government act with real care in their engagement with the Syrian opposition. I note that the Foreign Secretary told the House this afternoon that “All the support we provide will be carefully targeted, co-ordinated with like-minded countries, consistent with our laws and values, and based on rigorous analysis and risk assessment”. In the light of this commitment, what assurances can he give on the identity, ideology and tactics of the rebel groups to which the UK Government are now providing direct support, and what specific safeguards are in place to ensure that this support is not being channelled to jihadist forces operating within the Syrian opposition on the ground?
	I turn briefly to the efforts of the UN. I regret that it took so many months and lives for many finally to acknowledge that the Annan plan had failed—something that many of us warned was in prospect some months ago. In the light of this failure to reach an agreement on next steps at last week’s UN Security Council meeting, what is the Foreign Secretary’s assessment of the likelihood of either Russia or China changing course and supporting a UN resolution—even one enforcing sanctions on Syria or signing up to a global arms embargo? Of course, we welcome the work he set out on documenting human rights abuses but, in the light of the suspension of the UN monitoring mission, has the level of information getting out of Syria increased or decreased since the suspension of the UN mission?
	The Foreign Secretary concluded his remarks by stating: “we have not ruled out any options as this crisis deepens.” However, does he accept, and will he confirm, that there is today not the agreed legal basis, the regional support or, indeed, the public appetite for British ground forces to be deployed in Syria? It is imperative, therefore, that the Government focus their important efforts in the weeks ahead on unifying the international community’s response, uniting a fractured opposition behind a credible plan for inclusive political transition and addressing the continued and growing humanitarian need of the millions suffering in Syria today. If that is the focus of the Government’s work in the weeks ahead, they will continue to have the Opposition’s support.

William Hague: I am grateful to the right hon. Gentleman. Indeed, what he said in summing up at the end of his question is what I have been putting to the House, so we have a unity of approach across the House. In the absence of the international agreement and unity to mandate and require the implementation of the Annan plan or something very similar to it, we are setting out to continue to work on unifying the international community, to help to unite and assist the opposition in various ways and to address the humanitarian crisis. That is exactly our approach.
	I agree with what the right hon. Gentleman said about the deployment of British ground forces, which is not something I have heard anybody advocate in this country. However, it is also true that we do not know how the situation will develop over the coming months. It is likely to deteriorate sharply even from its current position, given the diplomatic outlook and given that a peaceful transition is becoming harder to achieve, not easier, as the fighting goes on and intensifies. Therefore, it would be wrong to rule out options, but clearly we are proceeding with care and caution in everything that we do.
	The right hon. Gentleman is right that the pace of the conflict has quickened. More than a quarter of the people who have died in Syria probably have died since the last time we discussed it in this House. That shows how terrible the events of recent weeks have been. He is right that that reflects not only the appalling brutality of the Assad regime, but a failure by the international community. That is due to only a small part of the international community. The UN General Assembly passed a motion on the subject, with which we were very happy, by 133 to 12 on 3 August. However, two of those 12 wield a veto in the 15-member UN Security Council, and have done so on three occasions. I said in my remarks at the Security Council last Thursday that the Security Council has failed, so I absolutely agree with the right hon. Gentleman’s analysis. This is a failure of the responsibilities of the United Nations Security Council. We should be very blunt about that.
	However, I have to inform the House that the prospects for a change in the Russian position are not strong at the moment. As I said, the Prime Minister and I both met President Putin when he came for the Olympics in early August. The Prime Minister discussed the Syrian situation with the President. From all the conversations that we have had with him and with Russian officials and Ministers, I think that the Russian position is likely to change only when the situation on the ground changes further to a substantial degree. Therefore, we have to
	make a success of all the other actions that we are taking, in the absence of the international agreement that we have sought.
	On those topics, the right hon. Gentleman asked about the shortfall, which is serious, particularly as the crisis is getting rapidly worse in terms of IDPs and refugees. That is something that we have called on the international community to address. The United Kingdom is setting a strong example, as I have set out. The Department for International Development is doing a great job in the work with the United Nations High Commissioner for Refugees and in supplying the necessary funds, and we will continue to encourage other countries to do so. Indeed, that will be a major topic for us at the UN General Assembly ministerial week, which I and the Prime Minister will attend later this month in New York.
	The right hon. Gentleman asked about buffer zones. We are sceptical in the current situation about buffer zones inside Syria. The United Nations High Commissioner for Refugees at our Security Council meeting on Thursday said:
	“all human beings have the right to seek and enjoy asylum in another state. This is a right that must not be jeopardized, for instance through the establishment of so-called ‘safe havens’ or other similar arrangements. Bitter experience has shown that it is rarely possible to provide effective protection and security in such areas.”
	We must weigh those remarks heavily.
	I pay tribute, however, to the people and Governments of Turkey, Iraq, Lebanon and Jordan for their generosity and hospitality. Many of the people who are fleeing Syria are initially going to camps, but in many cases they are then going to live in people’s homes, particularly in Jordan and Lebanon. We should bear in mind, as we provide the generous assistance that we are putting forward, that the people of those countries are also making an important contribution at a personal level. I paid tribute to them at the Security Council meeting last week as well.
	The right hon. Gentleman rightly asked about support for the opposition. Of course, this is an area in which we have to proceed with care, but I believe that the necessity of providing support for people in such a desperate situation outweighs the risks involved in doing so. There are risks attached, however. We know a lot about the various Syrian opposition movements—they vary greatly—and our knowledge of them is improving all the time. Our representative to them, John Wilkes, is working hard and knows them well. I therefore believe that it is possible, subject to the legal constraints and the legal advice that we always have to take on this issue, to channel the kind of assistance that I am talking about—communications equipment, water purification kits, protective clothing—to certain groups without the items falling into the wrong hands. In any case, we are not talking about anything that could cause lethal harm to anyone else, so we have that failsafe, if you like, on the assistance that we are providing. I will keep Parliament updated regularly on how that assistance is being provided and, as far as possible, on how it is being used.
	The situation is deteriorating further, and it does represent a failure by the international community, but we in this House can be confident that the United Kingdom is doing its utmost to help the millions of people caught up in this tragic conflict.

Richard Ottaway: I thank the Foreign Secretary for his statement, and I share his frustration with the United Nations; this calls into question the influence of the Security Council as far as this matter is concerned. I am disappointed that he is sceptical about a buffer zone. That was a proposal put forward by the Turkish Government and it must be taken seriously. Is his scepticism based on a conclusion that he would be unable to garner political support for the proposal, or would there be a military problem that would render it unenforceable?

William Hague: My hon. Friend is right about the United Nations on this subject, although I should stress that, although I have very bluntly said that the United Nations Security Council is failing in this matter, that does not mean that it is failing across a whole range of others. In recent months, the Security Council has been doing its job very well in respect of issues involving Somalia and Yemen, for example, but on this subject it is blocked and failing in its responsibilities.
	My hon. Friend said that a proposal for a buffer zone had been made by the Government of Turkey. These ideas are floated from time to time by that Government, but Turkey is welcoming refugees. It is of course concerned about the numbers coming in, but it is not suggesting any change to that approach at the moment. We know from bitter experience that we can advocate safe havens or safe areas only if we are absolutely confident that we will be able to protect the people in those areas and the people travelling to them. That would in turn require not only huge military force but the readiness to use that force. The international will to do that and the decision to do that are clearly not there.

Tony Lloyd: The Foreign Secretary is absolutely right to take credit for the constructive role of his own Department and the Department for International Development, and to draw attention to the lamentable failure of Moscow and Beijing to look to their responsibilities. He also mentioned the position of Lebanon, which is the most likely of all Syria’s neighbouring countries to see an extension of the conflict igniting within its borders. Is the international community sufficiently apprised of how dangerous that situation is, and of how intractable a return to civil war would be if that were to happen in Lebanon?

William Hague: I hope so, and I hope that we are helping to increase the recognition of the importance and fragility of Lebanon in these issues. I mentioned briefly in my statement that we are using conflict pool funding to increase the support we give the Lebanese armed forces. We are also working closely with the Government of Lebanon in understanding the whole situation and in highlighting their difficulties to the international community. I am glad to say that under the French presidency of the Security Council and the meeting we had last week, the Lebanese Government were invited to the Security Council and were able to put the very serious situation in their country directly to the Security Council. That has helped to highlight the international difficulties. We will encourage other countries to give Lebanon practical assistance of various kinds and to follow suit in respect of the refugees entering Lebanon.

Martin Horwood: Despite the bleak news it contained, may I welcome the Foreign Secretary’s statement and, in particular, the news of the significant humanitarian aid that the Government are bringing to the Syrian people? Mr Brahimi may have described his mission as “nearly impossible”, but he does have very strong contacts within the Arab League. In his conversations with the Foreign Secretary, did he tell him of any plans that Arab League members have for them to put pressure on Russia and China to lift their disgraceful vetoes, which are effectively preventing any international action against this doomed but murderous regime?

William Hague: Mr Brahimi is a very wise man. I pay tribute to the work of Kofi Annan, but I also welcome Mr Brahimi to this difficult post. He has set expectations as low as possible, which is a wise thing to do, particularly given the situation, but that does not mean he will be lacking in energy or ideas as to what to do. He will be working closely with the Arab League, as well as being the representative of the UN Secretary-General. The Arab League countries have indeed been putting pressure on Russia and China, but so far it has not worked. A large part of the world has been putting that pressure on, including many African nations, too. A majority of the UN member states have attended one or other of the meetings of the Friends of Syria, so the trend of international opinion is very clear, but that effort to change the minds of Moscow and Beijing has not yet been successful.

Mike Gapes: Twenty years ago, the Foreign Secretary was a member of a Government who initiated no-fly zones in northern and southern Iraq without explicit UN Security Council resolutions. Is it not time, even if President Obama is not interested, that this country, France, Turkey and other European NATO countries seriously considered what we can do to stop this growing humanitarian and political disaster?

William Hague: Clearly, we are doing a great deal, as I have set out, to address what the hon. Gentleman rightly describes as a growing humanitarian disaster. I have been careful not to rule out any option. He is putting forward a particular option, but I have to say that such an option would be practicable only with the full support of the United States of America. It is not something to advocate in the way that he did of, “Whatever President Obama thinks”; the air defences of Syria are an entirely different matter from those of Iraq 20 years ago. It is very important to bear that in mind when advocating that particular option.

John Baron: The west’s track record on protecting minorities in interventions of this sort has not always been good. What work is being done to ensure that the minorities in Syria, including the Christians and the Alawites, will be afforded the same protection as they have received under Assad should he fall?

William Hague: My hon. Friend makes a very important point, and this is a crucial part of our work with the opposition; it has certainly been a part of all the meetings I have had with different opposition groups from Syria. We stress, of course, that for their own success and
	support within Syria they need to represent the full range of not only political views, but ethnic origin and religious belief in Syria. It is very important that they do that. We are continuing to work with the opposition to help them present a united front and work together in a completely united way. The different opposition groups, including the Syrian National Council, have made many important and helpful statements about respect for all minorities in Syria, but we will not let up in reminding them that that requires practical action as well as strong statements.

Luciana Berger: What will the Foreign Secretary do specifically to put pressure on China and Russia to support a UN resolution enforcing sanctions on Syria and to sign up to a global arms embargo?

William Hague: We do not ever stop in our efforts on that point. Of course, we have done everything we possibly can to try to persuade them over the past few months, including my visit to Moscow at the end of May, the discussions I had with both the Russian and Chinese Foreign Ministers when we met in Geneva at the end of June and the meetings that the Prime Minister had in August. There is no let up in the efforts by the United Kingdom, France and the United States—and indeed many Arab countries—to try to persuade them. We will continue to do that. This subject will be a focus of discussion, as I have mentioned, at the UN General Assembly ministerial week later in September. Again, we will directly address the question face-to-face with the Russians and Chinese during that week. I imagine, without prejudging the Prime Minister’s speech to the General Assembly, that there is a high likelihood that the subject will feature in that speech. I have to be—[ Interruption. ] Yes, I might have something to do with writing it as well, but the Prime Minister will have views about what he is going to say. I have to be realistic and I am trying to be as frank as possible with the House and I have seen no sign that Russia will change its position without a further substantial change in the circumstances on the ground.

Rehman Chishti: Does the Foreign Secretary agree with some observers that the new UN envoy to Syria, Mr Brahimi, must have strong, real support from the United Nations Security Council or he will fail, like his predecessor?

William Hague: Yes, I absolutely agree with my hon. Friend. When I met Mr Brahimi in New York last week I encouraged him to be clear when he needs the support of the Security Council and to be ready to demand that support at crucial moments. I hope he will heed that advice.

Jack Straw: Like my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander), I commend the Foreign Secretary, his colleagues and his Department for their work. May I press him on Russia? We all understand what equities Russia has had in the Assad regime, but what explanation does he offer for why Russia has a belief that its strategic advantage lies in continuing to back the Assad regime while it is falling apart, notwithstanding that it might continue for a little while?

William Hague: There are several factors at work. One, of course, is that there is some regret in Russian Government circles that Russia abstained on the Security Council resolution that authorised the use of all necessary measures to protect the population of Libya. That is reflected in its approach to any subsequent parallel situation, even though in this case neither we nor anyone else has advocated a military intervention of the sort that we mounted in Libya. Russia is very reluctant to allow any resolution that it sees as leading to any such thing, despite all the reassurances we have given both directly and at the Security Council.
	On the right hon. Gentleman’s point about Russia’s assessment of its strategic interests, it is also possible that it has a different analysis of what is likely to happen in Syria. Our analysis, which I expressed in the statement and which is common in western nations, is that the Assad regime is doomed and that having spilt so much blood and presided over such a catastrophe it is not possible for such a regime to recover its authority or for Syria to return to any stable position while it continues in power. On that point, the Russian analysis might be different and that will lead Russia to a different policy position.

Several hon. Members: rose —

Dawn Primarolo: Order. A large number of Members want to contribute. I ask that contributions now be brief—one question, and clipped answers would be excellent, thank you Foreign Secretary.

Daniel Kawczynski: China did not veto resolutions on intervention in Libya. Have the Foreign Secretary’s Chinese counterparts explained to him what is the difference between Syria and Libya such that they are now obstructing us in the Security Council on the matter of Syria?

William Hague: That is a difficult explanation; certainly, they have tried to explain. They support a great deal of what we say, and the analysis and what should be done and the need for a peaceful transition in Syria, but they stop just short of supporting a chapter 7 resolution that would embody that in a UN resolution. I think the reasons are similar to the ones that I just gave to the right hon. Member for Blackburn (Mr Straw) about Russia.

Hywel Williams: What can the Foreign Secretary tell the House about worrying reports today of clashes between the Turkish army and Kurdish forces on or near the Syrian border? Does he agree that, whatever happens in Syria, this does not constitute political cover for the Turkish Government to attack over their border or further to oppress the Kurdish people?

William Hague: I absolutely agree that this does not provide political cover for that, and I have not heard any suggestion from the Foreign Minister of Turkey that it would do so. I am concerned about a series of clashes on the Turkish border involving serious loss of life, including among the Turkish armed forces, in a number of recent incidents. I have expressed our
	condolences to Turkey on those incidents, and this underlines the need to tackle the situation in all the ways that I have described.

Geoffrey Clifton-Brown: While I thank my right hon. Friend for all the actions he is taking, last week I met a coalition of most of the major American friends of Syria groups, which make the point that, at the current rate of attrition of 300 deaths a day, in the next 10 weeks—to the American presidential election—there could be another 10,000 people killed. They also make the point that, each day, people face Assad’s helicopter gunships and tanks. They are frustrated with the help that they are getting from the international community. What further can the international community do to prevent these dreadful atrocities?

William Hague: My hon. Friend is sadly right on the arithmetic, but the policy of the United States on the issue is identical to the one that I have been expressing as the policy of the United Kingdom, and that is a generally common feature across American politics as the United States comes to its presidential election. I have no information that there would be a sharp change in that policy should there be a change of Administration, so we have to continue to do the things that I have set out to keep up the pressure for international unity and action, and in the absence of those, in the five different ways that I have set out, to deliver ever increasing help, including to the Syrian opposition groups, to people caught up in the conflict.

Richard Burden: I welcome what the Foreign Secretary has said about the generosity of ordinary people, particularly in Jordan, Lebanon and elsewhere, quite apart from what Governments might be doing in taking in Syrian refugees. The United Kingdom has stepped up to the plate in the support that we are giving to the refugee relief effort. He says he is making representations to other countries to meet and to make up the shortfall. What response is he getting and what further pressure can we apply to other countries to step up to the plate as well?

William Hague: We cannot force other countries to do so. We can highlight the good example that we have set; that is one of the reasons that I went to the Security Council in New York last week. We can work through the European Union to increase aid, although the use of EU funds is at a good level. However, many nations in the EU have not made large bilateral donations. I will take that up with my EU colleagues, all of whom I will see at the end of this week, but we shall be active through our embassies all over the world, and very active in the forthcoming General Assembly, when we will be able to address all the nations of the world.

Kwasi Kwarteng: With regard to regional players, what efforts is my right hon. Friend making, alongside his colleagues in the Department, to engage such organisations as the Arab League, as well as wider players such as Kurdistan and others that share borders with Syria, to reach some sort of resolution?

William Hague: We work closely with the Arab League, which has done a good job and has passed its own sanctions or measures on Syria. Of course, we want to make sure that those are more uniformly implemented, so we will continue to discuss that with it. I visited Jordan at the beginning of the recess, and I will very shortly visit a wide range of other countries in the region to encourage the sort of co-ordination that my hon. Friend describes.

Keith Vaz: I welcome the steps taken by the Foreign Secretary and the International Development Secretary. Will the Foreign Secretary give the House an update on the level of assets of the Assad regime that have been seized in London? I know that this is a terrible crisis, but will he also keep his eye on the ball as regards Yemen, because the situation there is still at crisis level?

William Hague: Yes, we certainly keep our eyes on Yemen. Indeed, the Minister of State, Department for International Development, my right hon. Friend the Member for Rutland and Melton (Mr Duncan), is currently on his way to the latest meeting of the Friends of Yemen in Riyadh, at which the Friends of Yemen will encourage relevant donations to help with the situation in Yemen.
	We have taken all the action necessary under the asset-freezing decisions of the European Union in relation to 155 individuals and 55 entities. I am not sure that it is possible to quantify that in pounds, but if it is, I will write to the right hon. gentleman.

Julian Lewis: I know it is not an immediate priority, but has my right hon. Friend raised with the Syrian opposition the issue of the future of any chemical weapons stocks currently held by the Assad regime that might fall into the hands of the opposition?

William Hague: Yes, we have raised the very important issue of weapons stocks held by the Assad regime. I also raised it at the Security Council last week, and asked the UN Secretary-General to ensure that what is called the investigation mechanism is ready to be deployed if we have any reports of such chemical weapons being used or moved. Of course, a very strong warning has been sent by the United States and this country to the Assad regime about any possible use of chemical weapons. We have discussed the issue with the opposition as well.

Louise Ellman: What are the Foreign Secretary’s immediate concerns regarding the deployment of Syria’s chemical weapons? What does he think is likely to happen in the current situation?

William Hague: Well, there are only isolated and anecdotal reports of the use of such weapons—nothing that is verified on any substantial scale. Some of the refugees whom I met in Jordan in July referred to the use of poisonous weapons against them, but it has not been possible to verify that, and they meant that in the sense of small arms at a local level—not that that would be acceptable in any way. We do not have any evidence of the use of chemical weapons. Our hope and expectation is that they will not be used, but if they were to be used,
	it would be an extremely serious matter, and it might change some of the international calculations about this crisis.

John Glen: I should like to ask the Foreign Secretary about the non-lethal practical assistance being provided to protect unarmed opposition groups. What level of confidence does he have that we have the intelligence and infrastructure to monitor where that money is spent and ends up, so that my constituents can have some assurance that the money is not being wasted, and that our investment is in the right side of this war?

William Hague: We do have a good deal of information about how such equipment is used. I cannot say to my hon. Friend or to the House exactly how all such information will be arrived at, but we have information about how the equipment that we have provided so far is used, and are able to check on it in various ways, and will be able to do so, in various ways, in future. I can give him a considerable level of reassurance about that, but there is some risk; that is why we are supplying only non-lethal practical assistance in the first place. As I say, in such a desperate situation, the benefits and the need to supply such equipment outweigh whatever risks are attached to it.

Denis MacShane: Does the Foreign Secretary agree that one of the stabilising factors after the break-up of the Soviet empire and then the break-up of Yugoslavia was, paradoxically, the emergence of rather small states where people could live in harmony with each other, rather than being spatchcocked together? Instead of trying to preserve Syrian unity, might there be some case for two or three nations and states in Syria, none of them with the absolute power or military authority to oppress the others?

William Hague: That, ultimately, would be for the Syrian people, not for us, to decide. Whether or not that is something that they will want as an option in the future I do not know, but I doubt it, since I find the majority of the opposition groups from Syria strongly committed to the unity and territorial integrity of Syria. In any case, there are downsides. Although I accept much of what the right hon. Gentleman says about small nations, it is also true that when small nations are made out of a large nation, that can create a great deal of chaos, movement and sectarian conflict, so there are dangers in that as well.

David Rutley: I thank my right hon. Friend for the hard work that he is doing to oppose the atrocities of the Assad regime. Can he tell the House what progress is being made by international aid organisations in securing greater access to civilians at risk, particularly in Damascus, and what steps the Government are taking to support these important activities?

William Hague: My hon. Friend puts his finger exactly on a very difficult problem. There is some access; a good deal of aid does get into Syria. In particular, there are some areas of Syria where the regime has very little control on the ground, so much of the aid that I spoke about in my statement is getting through to people in Syria, but of course there are places where it is
	phenomenally difficult. The regime does not allow humanitarian access. That is another example of what a brutal and appalling regime it is. One of the things for which there was a general call at the Security Council last week was unimpeded access for aid and for humanitarian agencies to all parts of Syria.

Diana Johnson: I was pleased to hear the Foreign Secretary talk about additional humanitarian assistance being made available, particularly the £1 million to Jordan to help with refugees, focused on victims of sexual violence. Is that proving to be a big problem? What is its extent, and how will that money be allocated?

William Hague: It is a big problem. It has been a depressingly tragic and horrible problem in a series of recent conflicts around the world. It has, of course, been a problem through many periods of history, but we know much more about it today. Rape as a weapon of war is certainly used in the conflict in Syria. One can hear about that first hand from the refugees whom I have met in Jordan, and no doubt in other countries as well. Raising the awareness of this and dealing with the impunity that has existed for too long in this area will be a major foreign affairs theme of our G8 presidency in 2013, so it is something that we are already working on and feel passionately about in the case of the refugees fleeing Syria now.

Bob Stewart: I totally understand and accept my right hon. Friend’s assessment that the Assad regime is doomed. At some stage there will probably be anarchy in Syria. In such circumstances the international community will demand action, and that action will be humanitarian. From bitter experience may I suggest that humanitarian action without protection for the people going in would be rather silly? May I suggest to my right hon. Friend that any action that we contemplate should include a military element—not necessarily a British element, I hope, but international decent, good, well-trained forces to look after the people who are trying to save lives in Syria?

William Hague: There is an important point in my hon. Friend’s question: we could be dealing at some stage with the complete collapse of the Syrian state, a situation of anarchy and the breakdown of all order—there are many anarchic attributes to what is happening now—even in areas that have been less affected, and even in Damascus itself. That is why it is important that we do not to rule out any options for the future. If we come to that point, we must bear in mind his wise advice on this point.

Jeremy Corbyn: May I ask the Foreign Secretary to be more specific about the situation facing Palestinian and Kurdish people? There are reports that Palestinian refugees have been prevented from staying for any extended period in either Lebanon or Jordan. In answer to an earlier question he made the point that the Kurdish people are under attack within Turkey by Turkish forces and within Syria itself by some of the opposition groups. Is he confident that the opposition groups in Syria respect minorities and their rights?

William Hague: One of the important aspects of bringing the opposition groups together is uniting in one co-ordinating body the Kurdish elements of the opposition with the rest so that the point the hon. Gentleman makes is well understood and accepted by opposition forces in Syria, and we are of course encouraging that. There have been additional problems for some Palestinian refugees, on top of the tragic situation. We always make the point to neighbouring countries that Palestinian and Kurdish refugees have the same rights as all other refugees have to seek safety and asylum in neighbouring countries.

Neil Carmichael: The Foreign Secretary quite rightly mentioned five areas of work for himself and his colleagues. The first and the fifth are obviously mutually dependent and revolve around the condition and quality of the opposition, so I would like to probe how those links between the opposition and the outside will be developed in the immediate future.

William Hague: They are being developed all the time. There was a constructive meeting last week in Cairo of opposition groups, which we hope will be built on, and the UK special representative to the opposition is working with them on an hourly basis and giving good advice. We are working in that respect with countries such as Turkey, France and the United States and, importantly, with Arab countries, and we will continue to do so. I always stress to Syrian opposition groups that when a country such as ours faces an existential crisis, such as the last world war, across all parties we come together and sink all differences for the duration of the crisis. Syria is in an existential crisis and that is exactly what they need to do.

William Bain: Following the horrific airstrikes by the Assad regime, an estimated 180,000 refugees have fled across the border into Jordanian refugee camps. What representations will the Foreign Secretary make to his international counterparts to ensure that the estimated $700 million funding shortfall is met and a humanitarian disaster avoided?

William Hague: I hope that I have covered that in answer to previous questions. I made the very strongest possible representations at the Security Council last week, in bilateral meetings and in the Security Council itself. We will be doing this over the coming weeks through our embassies around the world and with our European
	Union partners—I will meet them all at the end of this week—and of course the Prime Minister and I will pursue this with all the nations of the world at the UN General Assembly later this month.

David Morris: I should like to commend my right hon. Friend on the measures he has taken to make progress on this matter. A protest group called Together We Can – For Syria in my constituency has been writing repeatedly to the Foreign Office. I would like him to clarify what changes on the ground Russia would like to see before getting further involved?

William Hague: I am grateful to my hon. Friend for his remarks. It is my view that there would have to be changes on the ground for Russia to change its position. Russia itself has not spelt out such conditions or criteria. At the meeting in Geneva at the end of June Russia signed up to an agreed transition in Syria and the creation of a transitional Government, as we all did, in the hope that that would make any other measures unnecessary, but now we have to make sure that such a transitional Government is actually created. Russia has not spelled that out; I am simply giving the House my analysis.

Chris Bryant: The Foreign Secretary is absolutely right to highlight the Russian Government’s disgraceful role in the barbarism we have seen in Syria, or at least in preventing the international community coming to a single mind on it, but will he clarify whether the statement made by his hon. Friend the Member for Esher and Walton (Mr Raab) yesterday in a national newspaper—that the British Government have written to the Russian Government to tell them that the 60 officials involved in the death of Sergei Magnitsky or the corruption he unveiled will not be welcome in this country—is accurate?

William Hague: I think that if I gave much of an answer to that I would be going very wide of the subject of the statement, and I do not want to incur your wrath, Mr Speaker, but I can say that there has been no change in our immigration policy. No doubt my right hon. Friend the Home Secretary will be able to comment on that in due course.

Mr Speaker: I am grateful to the Foreign Secretary and to colleagues.

West Coast Main Line

Application for emergency debate (Standing Order No. 24)

Tim Farron: I rise to propose that the House should debate the specific and important matter of the awarding of the west coast main line franchise to FirstGroup.
	I propose that the House should debate this matter in order to seek full and proper scrutiny of the decision. I hold no brief to stand for Virgin Trains—indeed, I have had many occasion to stand on a Virgin train—and I hold no brief against FirstGroup, but over the past three weeks, as I have been doing my summer surgery tour across the towns and villages of my constituency, the west coast main line franchise has been comfortably the most common subject raised by residents. Local people are deeply concerned about not only the decision itself, but the process, the lack of debate and the timing.
	There are now 165,000 signatures on the e-petition, Members from all parties are raising concerns, Select Committees are asking questions and there is a clear sense among the wider public that an extremely significant decision that affects them has been made without them having a say, and made during the summer recess when Members have no opportunity to express their views or interrogate the process and outcome. We might have expected a decision of this nature and scale, and one that will affect so many people across the UK, to be announced during parliamentary time to ensure that MPs and peers have the opportunity to debate the issue and scrutinise both the bidding process and the decision, but that did not happen. Instead, the announcement was made in the middle of the summer recess, allowing
	the House no opportunity to debate it. Today’s announcement that the awarding of the franchise has been suspended due to the judicial review gives us time to have that debate with greater possession of the facts on all sides.
	It is especially important that we have this debate because the franchise is the first to be awarded under the new longer franchise system. Over the next three to four years almost every other franchise in the country will be re-let, so it is more important than ever that this decision, the biggest and first, is properly scrutinised and, in particular, that we take our time to get the risk evaluation right. It is the risk evaluation part of the process that understandably causes the greatest concern because the available evidence shows that the risk evaluation process has been flawed in the past. On two occasions the process has led to the collapse of the east coast main line franchise and to First Great Western terminating its franchise agreement early to avoid failing to meet the terms of its bid. A collapse in the west coast main line bid because it was undeliverable would be economically catastrophic, given current conditions in this country, and a huge blow to all of us in Cumbria and the rest of the north-west of England. For those reasons, Mr Speaker, I ask that you grant us a debate on this most topical and strategically important matter.

Mr Speaker: The hon. Gentleman asks leave to propose a debate on a specific and important matter that should have urgent consideration—namely, the award of the west coast main line franchise to FirstGroup.
	I have listened carefully to the hon. Gentleman’s application. In this case, I have concluded that, although undoubtedly important, the matter raised does not meet the criteria for debate under Standing Order No. 24. I expect that the hon. Gentleman will pursue the issue by other means.

European Union (Approval of Treaty Amendment Decision) Bill [Lords]

Second Reading

William Hague: I beg to move, That the Bill be now read a Second time.
	As the House will know, the reason for the treaty change that the Bill approves is the crisis in the eurozone. That crisis was predictable and, in fact, predicted by some present in the House. The existence of monetary union without fiscal or economic union has led to severe economic strains in a number of eurozone countries and permitted the build-up of excessive debts by some members to an unsustainable level.
	I have always opposed Britain’s membership of the euro, as Opposition Members will no doubt recall, not only because of the single currency’s flawed design, but because of the limitations that it would impose on our national democracy. I think that there is now near-national consensus that we are better off with our own currency; I say “near” because the Leader of the Opposition has said that Britain could join the euro if he were Prime Minister for long enough—a pretty good reason for not allowing him to become Prime Minister at all.
	None the less, there are solid majorities in every national Parliament in the eurozone that wish to retain their membership of the single currency and see it restored to stability. They have their reasons for that, and we should respect them. Obviously, it is also crucially in our interests for the eurozone crisis to be resolved. As the—

William Cash: Will my right hon. Friend give way?

William Hague: It is a little early, even for my hon. Friend. In a few paragraphs, I will of course give way to him—probably more than once, I should imagine.
	The Governor of the Bank of England has said that the crisis is casting a black cloud of uncertainty over our economy. Eurozone countries could take a number of measures to bring about a resolution, and the decision about which are the right ones is for them. One measure that has been decided is the European stability mechanism, a permanent financial assistance mechanism established by the eurozone for the eurozone, to help eurozone countries that get into difficulties. The amendment to article 136 of the treaty on the functioning of the European Union confirms the ability of the eurozone countries to do that. The simple purpose of the Bill is to approve that decision.

William Cash: rose—

William Hague: I shall now give way to my hon. Friend.

William Cash: I am most grateful to the Foreign Secretary. Why in his own judgment and opinion is he prepared to invoke the exemption arrangements, the effect of which is to say that the matter does not really affect United Kingdom businesses, as was set out in the explanatory notes to the European Union Act 2011? Plainly, the implosion in Europe does affect us, and this failed attempt to put a sticking plaster on an increasingly impossible situation is simply making the position worse.

William Hague: Clearly, the economic crisis in the eurozone—“implosion”, as my hon. Friend terms it—affects us enormously, but so do many other things in the world such as the deficit of the United States and the economic policies of China. What we are dealing with is the approval of one change to article 136—a change that concerns eurozone countries and gives certainty to the creation of a treaty purely for those countries. It has an additional benefit for the United Kingdom, to which I shall come in the course of my speech.
	I do not pretend for a moment that the ratification of the decision or the establishment of the ESM alone will solve the eurozone crisis. As the present situation shows, many other things are needed for that solution. For the long term, sustainable public finances and globally competitive economies in all the eurozone’s member states are needed. Those tasks are vital not just for eurozone countries to succeed but for the United Kingdom as well, and are at the heart of this Government’s programme.

Kelvin Hopkins: I thank the Foreign Secretary for giving way. He has talked about resolving the eurozone crisis, but the measure will just pour good money after bad. Will not the ultimate resolution of the eurozone crisis come only when certain countries are allowed to leave the eurozone, recreate their own currencies and expand their economies again?

William Hague: Different solutions can be advocated and the hon. Gentleman is advocating what he thinks would help as a solution. However, the point that he and I have to bear in mind is that those countries—their national Parliaments and democratically elected Governments—wish to stay in the eurozone. That position is different from the one that he and I have always taken on the United Kingdom, but that is their wish. Therefore in practice we are dealing with that situation. We want those countries to succeed in stabilising the eurozone.
	Let us take the worst-case scenario—the hon. Gentleman’s assumption that the measure would pour good money after bad. What we are ensuring is that money from the United Kingdom taxpayer is not going after other money, good or bad, giving assistance to eurozone countries. The Bill provides solely for the parliamentary approval of an amendment to article 136 of the treaty on the functioning of the European Union, which makes clear that the eurozone member states may, by means of a separate intergovernmental agreement, establish a financial assistance mechanism—the European stability mechanism, or ESM—without acting in contravention of their obligations as member states of the EU.
	As the House will know, this is not the first time that this treaty amendment has been considered and approved by Parliament. Before the Prime Minister agreed to the treaty amendment decision in March last year, a motion in favour of the draft decision was passed by both Houses under the provisions of the previous legislation—the European Union (Amendment) Act 2008. Before our Act of last year, that was all the parliamentary scrutiny and control required for the Government to agree to a change in the EU treaties under the simplified revision procedure.
	In our view, those provisions were grossly inadequate, so at that time my right hon. Friend the Minister for Europe committed us to bringing the decision before
	the House again under the more stringent parliamentary scrutiny of what was then the European Union Bill. Indeed, we introduced an amendment to that Bill, now section 5(6), to enable the treaty change to be subject to the Bill’s provisions once it entered into force. That Bill has become the European Union Act 2011 and any use of the simplified revision procedure now requires an Act of Parliament for ratification. That is why this Bill is being presented to the House.
	Having gained the approval of Parliament in March last year, the Prime Minister formally agreed to the decision at the following European Council. The decision must now be ratified by all 27 member states before the amendment to article 136 can enter into force. Eighteen member states have now done so. The target date for entry into force, as set out in the European Council decision, is 1 January 2013.
	The scrutiny process under the European Union Act 2011 began in October last year, just under two months after its relevant provisions came into force, when I laid a statement before Parliament, to which my hon. Friend the Member for Stone (Mr Cash) has referred, under the provisions of section 5 of the 2011 Act. I set out in that statement why the decision does not trigger the requirements for a referendum set down in the European Union Act 2011.
	The proposed amendment to article 136 applies only to member states whose currency is the euro. Consequently, it does not transfer further competence or power to the EU from the UK. The opinion set out in the statement was open to judicial review, but in the intervening 11 months no one has sought to challenge it in the courts. To ensure timely ratification of the decision, which is strongly in our country’s interests for reasons that I will now come to, the Bill was introduced in the Lords, where it was passed without amendment. Should the Commons now grant its approval, the Government intend to ratify the treaty amendment by the end of this year.

Bernard Jenkin: Is this really such a big change in the scrutiny of how these things are done? Since we joined the European Union, has there ever been an amendment to the European treaty that did not require an Act of Parliament?

William Hague: Without the Act that we passed, the change that we are debating would not have required an Act of Parliament. Therefore anything similar achieved under a simplified revision procedure would also fall into that category.

Mark Reckless: Surely my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) was saying that throughout the history of the European Union every treaty amendment has required an Act of this House, so what we are doing today is no different from what has been done in the past.

William Hague: Yes, but in the past we did not always have the simplified revision procedure and the provisions of the Lisbon treaty that most Government Members—or rather most of us in the Conservative part of the coalition—opposed when the legislation was passing through this House. Even without this change in scrutiny, there would now be far greater scope for treaty changes without the passage of an Act of Parliament.

Denis MacShane: rose —

William Hague: For entertainment value, I give way to the right hon. Gentleman.

Denis MacShane: The Foreign Secretary’s two colleagues have made important points. This treaty requires ratification by the Parliaments of the eurozone and it is going through that parliamentary ratification. The notion that it could simply have been nodded through as a statutory instrument is silly. It is quite an important treaty, and this Parliament is right to be adopting it tonight; other Parliaments are doing likewise.

William Hague: Yes, other Parliaments are doing that in their own various ways. My point is that the reason this requires the full examination and passing of a Bill is the passage through this House of the European Union Act 2011, which the right hon. Gentleman probably opposed if he voted on it. A much briefer procedure was required under the European Union (Amendment) Act 2008, which he supported. Parliamentary scrutiny has been enhanced by the recent change, and I am merely establishing that point. [ Interruption. ] Labour Members are reminding me that they did not vote against the EU Act 2011—although they were probably unable to vote for it. Having taken so many positions on the holding of a referendum, they decided not to have a position at all.
	As the House will remember, the background to the ESM is that in response to the first Greek crisis, the previous Government, in their very last days, agreed to the establishment of two emergency instruments to respond to financial crises. The first is the European financial stability facility, an emergency facility established intergovernmentally by euro area member states. It has been used to provide loans to euro area member states in financial difficulty. The UK is not a member of that facility and has no exposure to financial assistance provided by it. The EFSF will operate alongside the ESM up until its wind-down by the end of June next year. The second is the European financial stabilisation mechanism, or EFSM. This allows the Council to agree by qualified majority a Commission proposal to provide assistance using money raised on the financial markets, backed by the EU budget. It has been used for assistance to Portugal and the Republic of Ireland, for which we also contributed a bilateral loan.
	In the new Government, we have never thought that that was a satisfactory state of affairs. It was a questionable use of article 122 of the treaty on the functioning of the European Union. An inability to access the markets because of the unsustainability of public finances is not a natural disaster, and it is hard to argue that it is an exceptional occurrence beyond a country’s control, and those were meant to be the criteria for the use of article 122. When qualified majority voting was introduced into the provision under the Nice treaty, we warned the then Government of the risk, and that warning was dismissed. The amendment to article 136 gave us the opportunity to deal with the problem, and we took that opportunity. Britain is not in the euro, we are not going to join the euro, and we should have no liability for bailing out eurozone countries.
	On coming to office, therefore, the Government found established a mechanism which enabled the Council of Ministers to decide by qualified majority voting to
	allow the European Commission to raise funds on the capital markets guaranteed by the headroom in the EU budget—about €60 billion—for loans to eurozone countries. We must grant that thus far this has not cost the British taxpayer a penny. The money is borrowed from the markets by the European Commission against the headroom in the EU budget. It must be granted that these are only contingent liabilities that would be called on only if Portugal or the Republic of Ireland defaulted on their loan obligations. However, it is still not right that a country outside the euro should be obliged to assume contingent liabilities for matters that are clearly the responsibility of countries that are in the euro. That is why this Government were determined to bring the situation to an end, and we have succeeded in our goal. That is a good example of this Government repairing the damage caused by the last one.

David Nuttall: I am extremely grateful to my right hon. Friend for giving way, because we have come to the crux of the matter. Will he please confirm that if the Bill goes through and reaches the statute book, this country will have no further liability whatsoever under the European financial stabilisation mechanism and will not be called on to contribute any further?

William Hague: That is what has been agreed. I am going to examine, in what my hon. Friend or other hon. Members might find painstaking detail—[ Interruption. ] Actually, I can see that some of my hon. Friends will not find it painstaking. I will go through this in detail to give full, frank and maximum assurance to my hon. Friend and others.
	Not only does the new mechanism, the ESM, which is limited to eurozone countries, supersede the EFSM; crucially, the decision that the Bill approves and which is being ratified by all other EU countries reflects in its recitals, or preamble, an agreement that article 122
	“will no longer be needed for such purposes”,
	The Heads of State or Government have therefore agreed that it should not be used for such purposes. Therefore, when this decision is ratified, our liability for future euro area financial assistance programmes under the EU budget will be removed. That is a great gain for British taxpayers and, because it fetters the use of article 122, a shift of a power from the European Union to the United Kingdom.

Mark Reckless: Will the Foreign Secretary give way?

William Hague: No, I am going to explain quite a bit of this, and then I will give way to my hon. Friend again.
	The House will want to know how our contingent liability under the EFSM is being brought to an end and—this was the question asked by my hon. Friend the Member for Bury North (Mr Nuttall)—how sure a protection we have against any future use. First, when eurozone member states agreed to bring forward the introduction of the ESM at the ECOFIN meeting on 23 January this year, the Chancellor won agreement from his fellow Finance Ministers that the EFSM would not make any new commitment as soon as the ESM comes into force, which we expect to happen this autumn
	when the German ratification process is complete. That is an important political agreement. Secondly, there is the decision that we are approving in the Bill and which all our European partners have agreed to ratify by the end of this year. The fourth recital to the decision reflects the agreement reached in the European Council to close off the future use of the EFSM or any such mechanism under paragraph (2) of article 122. As I have said, we expect every country to have ratified the decision by the end of this year.
	Those present who are cynical about the ways of the European Union—and there are such people here; in many respects I share a lot of their cynicism—may ask what would happen if, notwithstanding the decision, the Commission made a proposal to reactivate the EFSM or something like it. First, that would be a breach of a political agreement unanimously reached in the European Council, recorded in the Council conclusions, and reflected in the preamble to a decision unanimously agreed at the European Council and soon, we expect, to be ratified unanimously by all EU countries under their respective constitutional requirements. If, despite all that—this is an extreme hypothesis—the Commission made such a proposal and somehow received a qualified majority, the British Government would of course challenge any such measure before the European Court of Justice, citing the agreement of all EU member states in the European Council and the fourth recital to the decision in support of the argument that any such measure would be in breach of the clear intention of all EU member states and that article 122 would no longer be needed and should not be used for this purpose. Those would be very strong arguments indeed. That is the protection that we have secured against any future obligation to participate in bail-outs, and it is a good one.

Mark Reckless: Is there not a fundamental inconsistency in the Foreign Secretary’s position? On the one hand, he says that ratifying the European Council decision of 25 March 2011, which amends article 136, will affect only member states in the eurozone and not the UK, and that he therefore does not need a referendum. He then goes on to say, “Ah, look at recital (4) within the decision. That will mean that the mechanism cannot be used to impose costs on the United Kingdom in future.” That is surely a fundamental inconsistency.

William Hague: No, it is not. The decision relates to a treaty being created for the eurozone countries. In conjunction with that and at the same time, as is reflected in the fourth recital, the Prime Minister secured agreement at the December 2010 European Council that article 122 would not be used. That is absolutely clear. If my hon. Friend wants to argue that we should have a referendum on our not being liable for eurozone bail-outs anymore, he can do so, but I will not agree. That is not the kind of thing that we had in mind when we passed the European Union Act 2011; nor would it do any good to the good name of referendums.

Bernard Jenkin: My right hon. Friend is in something of a Catch-22, which he is skilfully trying to obscure from us. If the article basis for the May 2010 mechanism was illegal or questionable, why do we need this legislation to get out of it and why did we not challenge it? If it was not illegal, why is it necessary to amend the treaty to
	legalise a different mechanism? The very fact that the European Commission and the other member states have agreed to the treaty amendment, which effectively does away with the no bail-out clause that was so central to the passage of the Maastricht treaty, means that they admit implicitly that the original mechanism had an illegal treaty base.

William Hague: I do not agree with my hon. Friend. The reason we do not challenge that and want to proceed with the process is that we have secured something very important in parallel with it that is potentially enormously beneficial to this country and its taxpayers.

Bernard Jenkin: Which is what?

William Hague: I can go over that again. It is that article 122 will no longer be used for eurozone bail-outs. It may be my hon. Friend who faces a Catch-22 here, because he just cannot bear the idea that a Bill that says “European something” on it might be good for the country. This Bill is good for the country. Even those of us, like him and me, who are very sceptical about many aspects of the European Union have to admit that securing an agreement that means that we are no longer liable for eurozone bail-outs and that does not harm the country in any other way is, in the words of our noble Friend Lord Flight in the other place, a “no-brainer” to support. That is why I hope that the House will support the Bill.

Mark Reckless: Will the Foreign Secretary give way?

William Hague: No, I will not give way any further. [ Interruption. ] The right hon. Member for Rotherham (Mr MacShane) will never see me go native on European subjects.
	The ESM is being set up under an intergovernmental treaty that was signed on 2 February by the eurozone member states. That treaty is now being ratified by those 17 member states. It will come into force as soon as euro area member states representing 90% of the capital commitments to the fund have ratified the intergovernmental treaty.
	The treaty amendment that Parliament is being asked to approve in the Bill does not establish the ESM. Our clear view—this is part of the answer to my hon. Friend the Member for Harwich and North Essex (Mr Jenkin)—is that the treaty amendment is not legally required to set up the ESM. Eurozone member states, in particular Germany, want the legal certainty that the amendment provides, partly because of article 125, which is the no bail-out provision that he talked about. The UK, of course, will not ratify the ESM treaty because it has not signed up to the intergovernmental agreement, is not part of the eurozone and is not going to be part of the eurozone. The intensification of the crisis led eurozone member states to agree to bring forward the introduction of the ESM to this year. Their position has not changed the timing of the ratification.
	Members may also be aware that a legal challenge to the validity of the decision amending article 136 is currently being considered by the European Court of Justice. The Irish Supreme Court is seeking a ruling on whether it is valid, whether the ESM treaty is compatible
	with EU law, and whether eurozone member states can establish the ESM before the article 136 decision enters into force.
	We are wholly satisfied that the decision is valid from a legal perspective, but it is absolutely right that the Irish Supreme Court seeks the ruling of the European Court of Justice, particularly because Ireland is a member of the eurozone and a signatory to the ESM treaty. We do not expect the ECJ to find against the decision in any way, but should it find the decision invalid or the ESM incompatible with EU law, there would need to be a new ratification process. A failure to approve the decision would, naturally, have an unfortunate effect on our trading partners in the eurozone by undermining certainty about the legal validity of their firewall, and it would leave unratified the decision, the importance of whose recitals to us I have explained. That would be unfortunate from our point of view.

Mark Reckless: Will the Foreign Secretary give way?

William Hague: No, I have given way several times to my hon. Friend.
	The case for the Bill is straightforward. It means the end of any new contingent liability under the EFSM, and the end of any such future bail-out contingent liability.

Geoffrey Clifton-Brown: Will my right hon. Friend the Foreign Secretary give way?

William Hague: No, I am concluding my speech.
	The UK will no longer be exposed to any future programmes of financial assistance for the eurozone through the EU budget. The Bill will help our friends and neighbours in the eurozone, whom we wish to see prosper, in their search for financial stability in their currency area. This House has already agreed, under previous provisions, to the Prime Minister signing the treaty amendment. I hope that its merits mean that it will be approved again under the new and vastly more rigorous provisions that we have put in place. I commend the Second Reading of the Bill to the House.

Douglas Alexander: As the Foreign Secretary has set out, the context for this debate is the continuing crisis in the eurozone: the troika has yet to decide whether Greece has met its bail-out commitments; Spain appears to be on the brink of making a formal request for assistance; forecasters predict that the Netherlands, Slovakia, Slovenia and Belgium will all miss the European Union deficit target next year; and there are serious doubts as to whether Ireland and Portugal will be able to comply fully, with certainty, with the existing terms of their EU bail-out programmes. The need for decisive action by the eurozone is beyond doubt, and we believe that it is overwhelmingly in the British national interest that such action is taken.
	Today’s debate, as we have already heard, relates specifically to the content of the European Union (Approval of Treaty Amendment Decision) Bill. As the Foreign Secretary has set out, member states agreed, following a meeting of the European Council in March 2011, to the
	amendment of article 136 of the treaty on the functioning of the European Union, specifically to enable the creation of a permanent eurozone-only bail-out fund, the European stability mechanism.
	We should recognise this as a major institutional development for the EU. It sets up an International Monetary Fund-type body for the eurozone on a permanent basis, replacing the separate intergovernmental European financial stability facility, which was agreed when the Greek emergency first broke. As this is a treaty within the EU-27 framework, any amendments or changes must be approved by the established procedures for treaty ratification in each and every member state, even though the ESM will apply only to those member states that are members of the euro. It is, therefore, unlike the fiscal compact, which, despite the Prime Minister’s so-called veto last December, Britain was unable to block, and over which this Parliament has had no say.
	Indeed, the fiscal compact negotiated outside the EU framework by 25 members of the EU, without Britain or the Czech Republic in the room, establishes a completely new principle in European treaty ratification. It will enter into force when it is ratified by 12 of the 17 eurozone member states—a principle that, in our view, could work to Britain’s disadvantage in other contexts, and which is a direct consequence of not being in the room when such decisions are reached. The Bill, however, will lead to an enabling piece of legislation giving parliamentary approval to the European Council decision to establish a permanent eurozone-only bail-out fund.
	Let me make clear the Labour party’s position on the Bill. We are legislating today not on the substance of the ESM, but only on the enabling treaty change to allow it to be set up. Labour recognises the need for that enabling measure, so we will support the Bill. A more stable eurozone is important for the UK’s long-term growth and prosperity. Indeed, as the eurozone accounts for more than 40% of our external trade, prospects for business investment and export growth depend on it.

William Cash: On the claimed virtues of the single market, does the shadow Foreign Secretary accept that we have in fact run up the most monumental deficit with the other 26 member states of the EU, to an extent that it is now damaging our economy and thereby preventing this country from achieving growth?

Douglas Alexander: I can assure the hon. Gentleman that if I were to draw up a list of what is damaging the economy of the United Kingdom at the moment, many items would stand above a recognition that the single market has provided British businesses with European markets constituting 500 million consumers. It would be perverse logic to suggest, at a time when we are struggling to secure growth in the British economy, that it would be to the advantage of British exporters or British businesses more generally to shrink the UK’s home single market from 500 million consumers to just 60 million.
	A mechanism with sufficient firepower to restructure and recapitalise weak banks, and to bail out Governments who can temporarily no longer access the bond markets to finance their borrowing and debt, is a necessary part of bringing stability back to the eurozone, and a permanent
	bail-out fund is one key part of making that happen. However, the burden of responsibility for delivering that growth and prosperity must be taken by eurozone members themselves. In the establishment of the ESM, the European Council is making it clear that ultimate responsibility for ensuring the overall stability of the euro area rests with eurozone members. It will be a fund by the eurozone for the eurozone. That is clearly in the UK’s national interest, and we will not vote against a Bill that will allow the ESM to be established.

Bernard Jenkin: Why, then, was the previous Government’s parting act to agree that the UK should be liable under the stability mechanism that they approved?

Douglas Alexander: The hon. Gentleman is right to recognise the timing of that in the final days of our time in office, but the other significant event that was happening then was the real prospect of the eurozone collapsing completely. He might welcome that, but the Opposition certainly would not. That was why the Chancellor of the Exchequer of the outgoing Government made genuine efforts to consult the potential incoming Finance Minister, who is now the Chancellor of the Exchequer. That matter is discussed in the explanatory memorandum on European Union legislation dated 15 July, in which the then Economic Secretary to the Treasury, now the Transport Secretary, stated:
	“The Government regrets that the Scrutiny Committees did not have time to consider this document before it was agreed at Council. It should be noted that whilst agreement on behalf of the UK was given by the previous administration, cross-party consensus had been gained.”
	If the hon. Gentleman is concerned that the outgoing Chancellor reached the wrong decision, he might like to put that point directly to the current Chancellor.
	Let me be absolutely clear that our support for the Bill does not equate to unqualified confidence in the ESM or in the current package of eurozone policies of which it forms but one part. We have concerns about both the restrictive terms of the fiscal compact that eurozone members have negotiated to establish the ESM and the manner in which it is currently envisaged that the ESM will be operationalised. The Opposition are certainly under no illusion that the ESM in itself will resolve the eurozone crisis. Much more will be required to do so than is included in this two-clause enabling Bill. The establishment of the ESM represents but one part of a broader package of measures and reforms that members of the euro must adopt to deliver stability successfully and bring greater prosperity to the eurozone in future.

Denis MacShane: I am following my right hon. Friend’s speech with considerable interest and agreement, but should not we not change the tone slightly? We hear, “The eurozone must adopt this”, “They’re at fault”, “The pound zone is perfect.” I am going to Poland tomorrow for a big eastern European economic conference, and there is not the same patronising indifference to the eurozone there. There is not a view that the zloty zone is perfect. We are all in this together, and the trouble with the Government’s approach is that it sells the public the lie that there is a thing called the eurozone out there, but it is a far-away economic region of which we know not very much and in which we are not very interested.

Douglas Alexander: I hope I can give my right hon. Friend the assurances that he seeks. The Opposition are far from indifferent about the future of the eurozone, not least for the reason that I have already explained—many British jobs and exports rely on the eurozone coming through the current crisis. His point highlights one of the delusions that is apparent among at least a few Members, which is that if Britain were to leave the European Union, the concerns that currently afflict the eurozone would somehow become remote from the interests of British jobs and workers. The eurozone will continue to be of absolutely fundamental interest to British manufacturers, exporters and jobs. The Prime Minister arrived at a recent summit lecturing the Germans and left being shouted at by the French, and that certainly does not seem to me to be how to secure the type of agreement that I sense lies behind my right hon. Friend’s question, which we want to see in the best interests of stability in the eurozone.

Kelvin Hopkins: Is it not the case that countries such as Poland and Britain have the great advantage that they can choose a parity for their currency that is appropriate to their own economies, rather than being forced to adopt a wholly inappropriate parity through the eurozone like Greece, Ireland and a number of other countries? Does my right hon. Friend agree that if Britain had joined the euro with the parity that existed at that time, we would now have a wrecked economy?

Douglas Alexander: It is hardly a revelation that I strongly supported the five economic tests back in the years immediately following 1997, whether in relation to the convergence criteria or more broadly. In that sense, the Opposition’s position has not changed. It was an intriguing interpretation of history by the Foreign Secretary to attribute to his own conduct out of office so much credit for what the Labour Government did in office in keeping Britain outside the euro. However, he is right to recognise that there is broad consensus, which extends even to the hon. Member for Cheltenham (Martin Horwood), that there is no immediate prospect of British entry to the euro, for some of the reasons that my hon. Friend describes.
	Let me be clear about some of the Opposition’s specific concerns, in a spirit of genuine concern about and mutual interest in the eurozone. First, we believe that the eurozone firewall needs to be bigger in scale and more flexible in operation than the ESM alone currently allows. Although the ESM is a key part of that broader firewall, an effective European Central Bank should also be used to enhance, and contribute to the establishment of, an effective firewall. Since the House last debated the matter, the ECB has announced its intention to begin buying bonds if member states comply with the relevant conditions regarding the management of their fiscal budgets. That is a welcome development, and we look forward to the ECB president Mario Draghi’s announcement this Thursday of how that new programme will work. The ECB must now deliver on its promise if it is to function properly as a lender of last resort and provide the necessary firepower to support the eurozone economies effectively under bond market pressure.

William Cash: Will the right hon. Gentleman give way?

Douglas Alexander: I am keen to make a little progress, but I will endeavour to give way to the hon. Gentleman in due course.
	Secondly, stability in the banking system is vital, and where that requires action it should take place swiftly and with urgency. That is why we welcome the recent announcements about the ESM, which represent steps towards recapitalising weak eurozone banks. If responsibility for recapitalising national banks rests with national Governments, the problems of countries such as Spain risk only getting worse, because state support for the banks will further worsen those countries’ fiscal outlook. We therefore agree that within the eurozone, it makes sense for the ESM to be able to play a leading role in bank restructuring and recapitalisation. Although there is agreement in principle about that, it is vital that the eurozone begins taking action on it more urgently than it has to date. We cannot afford to wait for full agreement on a banking union before the process of recapitalising Europe’s banks begins. It needs to take place over the coming months.
	The failure of eurozone members to accept fully the logic of a single currency must be addressed, and alongside a banking union, some form of debt mutualisation may have to be considered. Simply put, creditor countries must be willing to shore up debtor countries in the short term if they are to guarantee their own stability in the long run. That may be a bitter pill for countries such as Germany to swallow, but it is the only cure for the eurozone as a whole.

William Cash: On the role of the ECB, Mr Draghi and the proposals on bail-outs, does the right hon. Gentleman agree with the president of the Bundesbank, Mr Weidmann, or with Angela Merkel?

Douglas Alexander: I would not wish to intrude on the constitutional differences between the Chancellor of Germany and the governor of the Bundesbank. President Draghi bears a heavy burden of responsibility on Thursday to add detail to the terms of the guarantees that he was judged to have offered on the basis of his rhetoric at the previous press conference in the summer.
	There is clearly a divide between those who, despite the economic facts, remain wedded throughout Europe to an austerity-only approach and those who recognise the need for a growth-led recovery alongside genuine efforts at medium-term deficit reduction. It is regrettable that our Government appear to be firmly on the wrong side of the divide. However, I welcome the fact that, at the last EU summit, a useful but modest growth package was agreed, although I regret that the Prime Minister of the United Kingdom remained bound to the last to the old Merkozy-style approach.
	As part of the new focus on growth across Europe, we support a significant increase in the capital of the European Investment Bank and the concept of infrastructure bonds to finance major capital investment projects. The European Union must also learn to use existing resources better without spending more. A genuine plan for growth must start with reform of the EU’s 2014-20 budget, which, at more than €1 trillion, has the potential to make a real impact on the European economy’s recovery by spending less on agriculture,
	more on infrastructure, small business growth and research and development, and better using the money currently spent through existing EU structural funds.
	Alongside those targeted measures to stimulate growth, the Government should call for the completion of the single market and the digital and energy markets. Completely removing existing obstacles could translate into a 7% increase in incomes per head in the UK, according to the Department for Business, Innovation and Skills. Further integration could therefore provide a genuine and much-needed boost to growth.

Mark Reckless: The shadow Foreign Secretary is giving us a tour of the European horizon, but may I pull him back to the Council’s decision, which we are asked to ratify tonight? Does he consider that decision to include the recitals?

Douglas Alexander: As a former Minister for Europe—and the current Minister for Europe is sitting on the Front Bench opposite—I can say that there is a Council legal service, which can advise about the standing and authority of the recitals. If I recollect correctly, recitals have been judged in previous legal cases to have persuasive effect, and would certainly inform any subsequent legal judgment about Ministers’ intentions in the Council meeting at the time. I therefore think that it was appropriate for the Foreign Secretary to rehearse in some detail the terms of the recital to inform the House about the basis on which the Council reached the decision at the meeting. Perhaps I would add to the Foreign Secretary’s earlier comments that the other great strength of the proposal is the explicit nature of the understanding that the problem is for the eurozone and must be addressed by eurozone members. I have been candid in recognising that, in the teeth of the crisis, in the final days of the Labour Government, decisions were made that reflected the urgency of the moment. One reason why it is in Britain’s interest to support the amendment to the treaty is the facilitation of the eurozone countries’ assumption of the responsibility that we have long argued that they should accept for the currency’s continuing structural problems.
	Let me turn to an issue that the Foreign Secretary raised only briefly, in passing. I anticipate that other colleagues will also raise it. It is fair to recognise that the eurozone crisis is now having an impact on the British economy. However, it is wholly wrong to claim, as the Government are trying to do in several different forums, that the current double-dip recession in the UK is the result of the ongoing eurozone crisis. That is an excuse, not an explanation.
	First, for most of early 2012 and 2011, exports, including to the eurozone, were keeping the UK out of recession. Secondly, the UK recovery stopped in late 2010, well before the eurozone crisis had fully taken hold. Thirdly, of all the G20 countries, only Italy is in recession as well as the UK, and although the eurozone as a whole is now contracting, it is has not seen three successive quarters of negative growth as, alas, we have witnessed in the UK under the current Government. Although the crisis in the eurozone poses serious risks to the UK economy, the Government’s failed economy strategy has rendered our economy more vulnerable and more exposed to these risks than we needed to be.
	The establishment of the ESM is therefore a necessary, if partial, response to the problems afflicting the eurozone. The risks still confronting the eurozone are real and immediate. Ratifying the treaty amendment that allows for the ESM’s establishment must not be seen as an excuse for inaction on the other vital areas where the eurozone is still required to act, or, indeed, on the change of course that is now needed here in the UK.
	Amendment of the treaty is not only in the eurozone’s interest, but in that of the UK. For that reason, we support the Bill.

William Cash: The Bill is living proof of the Alice in Wonderland Euro-fantasy that permeates every nook and cranny of the failed European project.
	Decisions, which were taken as long ago as 25 March 2011, when we last debated the issue—shortly afterwards, several of us voted against the proposals on a deferred Division—cannot and do not work. It is as simple as that. There is simply not the money to go round, as I said when I had the opportunity of cross-examining the Prime Minister at the Liaison Committee well over a year ago.
	It may be very fine to provide a quack remedy to make the Euro-integrationists feel that something is being done, but the proposal, which Mr Rompuy and the European Council described as
	“ensuring the stability of the euro area”
	is as effective as taking a dose of snake oil to hold off the consequences of an economic earthquake.
	A Harris opinion poll this week on whether the measures will deal with the debt crisis in the eurozone showed that only 15% in the United Kingdom were confident that they would have any effect. That applied to only 25% in France, 33% in Italy, 20% in Spain and 24% in Germany. That is the most recent opinion poll on the effect of the proposals in the eyes of the voters, not the Governments, élite or establishment in each of those countries, let alone many others.
	Of course, we all know that Germany holds the key to the eurozone. As I said in interventions on the Foreign Secretary and the shadow Foreign Secretary, Jens Weidmann, the increasingly realistic and sceptical president of the Bundesbank, stated only a few days ago that, as I have often said, intervening in the bond market is effectively breaking the no bail-out rule, which was set up under Maastricht—I foretold that it would not work—and prohibits the ECB from financing Governments and states. He said that if the Governments of the eurozone become dependent on the power of the ECB, they will never do anything for themselves, that it would be like pouring money into a black hole and that it
	“can become addictive like a drug”.
	The use of article 122, which the Foreign Secretary attempted to argue around—somewhat disingenuously, I say with respect—breaks the law. The European Scrutiny Committee said that, to all intents and purposes, its use was illegal—not that it was not needed, but that it was illegal. It is there for dealing with natural disasters and earthquakes, not economic problems.

Martin Horwood: The hon. Gentleman is making his usual case that the use of article 122 was illegal. That may be his view, but it was clearly being used for the European financial stabilisation mechanism and therefore posed a liability for this country. Surely he must welcome a Bill mechanism that allows a treaty that reduces our liability. The new ESM will not include Britain, and we will not have that same liability. As a good Europhobe, he should support the Bill.

William Cash: As a Euro-realist, I am glad we will no longer be liable under the European financial stabilisation mechanism, but that does not exonerate the arrangements that were made by the then Labour Chancellor of the Exchequer, and by the current Chancellor, not to mention the Business, Innovation and Skills Secretary. In May 2010, as the former Chancellor makes clear in his book, they were all involved in endorsing the decision on the transitional arrangements between the outgoing Government and the current one. The illegality is shared by all members of the previous and current Governments.

Mark Reckless: My hon. Friend ascribes responsibility to a number of politicians, but what about the role of Sir Jon Cunliffe, our permanent representative in Brussels at that time? He had a key role in the matter, and since that time has been promoted.

William Cash: My hon. Friend and others have pursued that relentlessly and still have no real answers. The truth of the matter is that a number of things were done at or around that time that many people now rather regret—let us put it that way. The fact that the EFSM is now described as “not needed” is disingenuous because people know perfectly well that it was illegal. That is not just my opinion—I make this comment to the hon. Member for Cheltenham (Martin Horwood)—but the one reached by members of the European Scrutiny Committee as a whole in the light of what we heard.

David Lidington: May I make a plea to my hon. Friend and to my hon. Friend the Member for Rochester and Strood (Mark Reckless)? It is one thing to criticise Ministers or Government policy on the European Union, but will they please not direct criticism directly at named officials, who serve Labour, Conservative and Liberal Democrat Ministers loyally and to the best of their ability in the impartial tradition of the British civil service?

William Cash: I am delighted that my right hon. Friend makes that point and I endorse it as a general principle, but instances occur periodically that require a certain amount of investigation and analysis. I did not entirely endorse the remarks made by my hon. Friend the Member for Rochester and Strood (Mark Reckless) in as many words, but I agree with him—and with others—that, at the time in question, decisions were taken that people now regret. I am glad that we have moved on from article 122 to the present European stability mechanism.

Douglas Alexander: rose —

William Cash: I would rather get on with my speech than continue to dwell on the outrageous decision taken, but I will certainly give way to the shadow Foreign Secretary.

Douglas Alexander: First, may I identify myself with both the spirit and substance of the remarks offered by the Minister for Europe? Secondly, before the hon. Gentleman proceeds with his speech, does he accept that, notwithstanding his demand for continued investigations, one of his colleagues has perhaps fallen into error in suggesting that the named individual was the permanent representative in Brussels at that time? I think, in fact, that his predecessor was in post at the time when the decisions that are being discussed were reached.

William Cash: I cannot possibly comment, as they say, on that particular point because I am not aware of all the circumstances. Although mistakes were made, the point regarding the ESM is far more important. I accept that the EFSM is now in the past, but it was an unfortunate incident and all parties involved were culpable of allowing it to be endorsed as a proposal—it remained effective for far too long, with obligations on the United Kingdom and its taxpayers.

Mark Reckless: The individual concerned was a senior official in the Treasury at the time—I was referring to his current position. The Europe Minister and the shadow Foreign Secretary have supported what their senior officials in a number of positions say, but if the House had had the chance to scrutinise the individual concerned, and if either the European Scrutiny Committee or the Foreign Affairs Committee had been able to determine his appointment, we might be in a different position.

William Cash: We have probably gone through that in as much detail as is required or necessary on this occasion. My point is that it is not the case, as the Foreign Secretary and the papers to which he is religiously sticking state, that article 122 arrangements for the EFSM are no longer needed. That is not only disingenuous, but verging on something much worse. It is not just a question of them not being needed, but I will leave it at that for the time being.
	The real question is on the problems that will emerge in practice from the continuous stream of payments and bailouts, putting heads in the sand and the complete abnegation of reality. It is clear—the most recent edition of The Economist indicates as much—that the euro will turn into a soft currency with high inflation. The general secretary of the CSU, the Bavarian party that makes up part of the coalition in Germany, accuses the European Central Bank—this is a far worse accusation than any regarding the EFSM—of becoming
	“the currency forger of Europe”.
	There are profound reasons for that accusation, which is made by one of the most senior members of the German coalition. I could spend a fair amount of time going through technical and legal points on the European Act 2011, the exemption conditions and the opinion of the Foreign Secretary, but the issue is much more serious than treading through the maze of legalities created by the Act. This is about the substance of the manner in which the European Union functions and fails.
	I shall come to the attitudes of German voters later, but it is important that people throughout Europe recall, as Germans do, what happened in the 1930s and subsequently. The economy’s implosion and high inflation—evidence that the economy was completely out of kilter with reality—ultimately led to disaster and
	the emergence of Hitler from the Weimar republic. Those things are brought to mind by the CSU general secretary’s accusation that the ECB is becoming
	“the currency forger of Europe”
	to provide the scale of bailouts contemplated under the Bill and the treaty. Massively high inflation is caused by printing money when a country does not have it on the basis of how it runs its economy. No wonder only 24% of more than 1,000 German voters polled had confidence in the short-termism that such measures represent.
	Angela Merkel is certainly bidding for a new European treaty—it has not been received with enthusiasm, but the treaty issue has not gone away. In December, there is a fair chance that she will come back for a new treaty that will effectively create yet another step towards political union. We know perfectly well—it is no longer taboo, although I have been saying it for the best part of 25 years and it is now reality—that Germany is now moving further and further towards political union, which it will largely dominate, although more and more Germans are against the bail-outs, even to the point at which, as The Economist suggested last week, Mr Viedman is now seen increasingly as Angela Merkel’s Thomas à Becket, having been one of her most loyal supporters. This is a very serious matter, but the shadow Foreign Secretary simply does not see it. I asked him whether he agrees with Angela Merkel or with Mr Viedman because that is what is at the heart of this Bill.
	The worst of it is that in fact it is not going to work anyway. Mrs Angela Merkel knows that Mr Viedman is right on economics, but she has her own agenda of political union as the centrepiece for the destiny of Germany, as she has repeatedly argued. It is not just Germany. Spain is rapidly following Greece over the euro cliff, with Italy not far behind, not to mention the continuing problems in Portugal, Ireland, Cyprus and a stack of other countries. It is even now becoming a problem in respect of the individual provinces in Spain—Catalonia, Valencia, Murcia and other regions are lining up while Spain dives into a double-dip recession. There simply is not the money to pay for the catastrophe that the European economic system has created.

Michael McCann: Does the hon. Gentleman not think it odd that we should lecture the eurozone about double-dip recessions when we are in one ourselves, created by the Government whom he purports to support?

William Cash: That is a very nice little intervention, because the reason we are in a double-dip recession—in so far as we are—is, first, the massive deficit that the hon. Gentleman’s Government left us with. Secondly, for reasons that I will explain, it is because of the massive deficit—as I said to both the Foreign Secretary and the shadow Foreign Secretary—that the European Union has with us. We are in such incredible deficit with the other 26 member states that it will be impossible for us to gain out of the 50% of our trade with them the growth that is needed to enable us to come out of recession and grow our economy.
	I was disappointed, to say the least, that the problems with the eurozone were not even touched on in the exchanges between the Chancellor of the Exchequer
	and Andrew Marr yesterday, when everybody knows that the failure of the UK economy is partly because of the deficit we inherited, but also because we cannot grow with a bankrupt European Union, with the exception of Germany. Indeed, half of our deficit with the other 26 member states is our deficit with Germany alone. So we have to be conscious that this is a real problem that needs to be resolved, and this Bill will do almost nothing except damage our economy.
	Greece is currently in the throes of an EU-IMF economic investigation. One can almost hear the words of endorsement from the EU and the IMF before they have reported. I will be very surprised if they do not try to find some way to muddle through. As with the Bill and, I am afraid to say, the Government’s policy on Europe, real EU reform is off the agenda, as is a referendum.

Martin Horwood: The hon. Gentleman is very free in his criticism of the IMF—

Nigel Evans: Order. The hon. Gentleman is not only in danger of crossing the Floor, but is turning his back to the House. Please will he address the House.

Martin Horwood: I beg your pardon, Mr Deputy Speaker. I will try to do better.
	The hon. Gentleman is free with his criticism of the IMF and the EU and everyone else, but may I ask him a basic economic question? If not this, what? Does he advocate the chaotic disintegration of the eurozone? Does he ask the Germans not to seek guarantees for the finance they are providing for other European economies? Does he suggest that there should be no legal framework behind the necessary steps to tackle structural deficits in the eurozone countries? I can think of nothing that would more surely damn the whole European economy, including ours, than a chaotic disintegration of the eurozone.

William Cash: Again, I am grateful for the intervention because back in the 1990s during the passage of the Maastricht treaty—and I say this without any sense of self-satisfaction—I predicted that this is where we would end up. Massively high unemployment, riots in the streets, the rise of the far right and the implosion of the European economic system were all predicted in the Maastricht treaty debates. It is there in black and white. It is no good now saying that because those of us who took that position and made those predictions then were right that, somehow or other, we should say, “Well, that is just the past. Let us not worry about the present.” We are looking towards the future and we need to have an association of nation states based on the principle of consent by the voters, who have already expressed their views in repeated opinion polls and are denied referendums.

James Clappison: Does my hon. Friend recall that almost exactly the same lines of argument and descriptions were applied back in 1990 to the same prophecies about the UK exit from the exchange rate mechanism?

William Cash: My hon. Friend is right. Those of us who argued that we should come out of the ERM were laughed at. But on that famous date, 15 September—

Kelvin Hopkins: Golden Wednesday.

William Cash: Indeed, although it is known by others as Black Wednesday. However it is described, it saved our economy then.
	To come back to the unemployment that has been inflicted by treaties that are not meant to be changed—the single currency is regarded as irrevocable—the youth unemployment level in Spain has moved beyond 52%, as it has in Greece. Other countries are moving in the same direction and the quack remedy contained in these bail-out provisions does not have enough snake oil in the bottle to make it even half realistic.
	There are those, such as the coalition Government, who claim that under the arcane procedures of section 4(4) of the European Union Act 2011, we should vote for this arrangement because it will solve the euro crisis and—miracle of miracles—will not affect us. That is but a harrowing indication of the pain of hopelessness in the face of proven experience. There have been at least 20 economic summits in the past 24 months and not one has come up with a rational solution. All they ever do is promise more and more money that they do not have, with the implicit assumption that if they do not have it they will print it, and break the rule of law—the law laid down through the European Union that we implement under the European Communities Act 1972. Although we are not members of the eurozone, it certainly affects us, and it certainly affects the other European countries.
	The explanatory memorandum to the 2011 Act, which I and many other colleagues here voted against, put down amendments to and did everything in our power to prevent from passing, because it simply was not going to work, stated that
	“an Article 48(6) decision does not apply to the UK merely”—
	I repeat “merely”—
	“because it may have consequences for individuals or organisations within the UK, such as UK businesses.”
	Believe it or not, that is given as a reason why a referendum is not required—because it would “merely” have an effect on UK businesses. That is on the astonishing grounds that although it has consequences for the daily lives of our voters and their small and medium-sized businesses, it is a mere detail that under the 2011 Act the Government can swat away with reference to “the opinion of the Foreign Secretary”. And that opinion cannot be properly challenged. Anyone who knows anything about administrative law knows that where an Act of Parliament states, “In the opinion of”, it effectively bars challenge in judicial review. I would be extremely surprised, therefore, if it was possible to set up a judicial review—I noted that the Foreign Secretary said that none had been forthcoming. People might well assume that because those words are in the Bill—it has not been enacted yet—there is no point in seeking to upset it because it will only have effect when it becomes an Act of Parliament.
	The legislation goes further. Clause 1(3) explicitly states that the decision taken by the European Council on 25 March 2011 does not warrant a referendum, on the spurious grounds that it is the view of the Foreign Secretary, whose opinion once given cannot be effectively challenged, irrespective of the consequences for voters
	and UK businesses. I certainly concede that we are not part of the eurozone or directly contributing to the bail-out, but what is happening is having a devastating impact on our growth.
	As I said in reply to an intervention a few moments ago and as I clearly demonstrated in an article I wrote for The Daily Telegraph on 14 August, I simply do not subscribe to the view that changes in planning law and ever-more Keynesian attempts to boost public spending will do anything if we do not sought out the problems with the single market. We are trading a monumental deficit with the EU, and it is doing immense damage to our economy. Trading with the EU is now like trading with a bankrupt company. The Bill will allow the drug of continual bail-outs, so heavily criticised by the President of the Bundesbank, with the involvement of the ECB, to drag Europe into an ever-deeper maelstrom. To then pretend that it does not affect us, when 50% of our trade is with the EU, is economic and political nonsense on stilts, which is why I voted against the proposals in 2011. Since then the situation has got worse and worse.

Jacob Rees-Mogg: I am grateful to my hon. Friend, with whom I nearly always agree, for giving way. However, if Europe is determined to follow an economic policy for the eurozone that is completely idiotic, there is no referendum in this country that could stop it. So I do not see what a referendum on this subject would do.

William Cash: I am merely arguing that, given the consequences of the mistakes being made and the damage they are causing to our economy, in the light of the 50% trading, we need to renegotiate the economic governance of Europe. The consequences of our not doing so would take us into the same kind of deep black hole that it is already in. I did not say, at this juncture of my speech, that I thought that a referendum on this issue would necessarily produce all the answers to that question. I am committed to the idea of a referendum on more general terms—with respect to the EU as a whole—but I take my hon. Friend’s point on that particular issue. I insist, however, that the European project needs to be renegotiated into an association of nation states, not unlike the European Free Trade Association in the EU, based on the principle of consent. That issue should be the subject of a referendum on the broader landscape of the direction in which the EU is taking us.
	The explanatory notes to the Bill state that the exemption condition is met if the Bill, as enacted, states that the decision is not within section 4 of the 2011 Act. In other words, under the Bill, everything is fine, whatever the consequences, if Parliament is foolish enough to state in the Bill that what is patently absurd can possibly benefit the voters of the UK. I have pressed the Foreign Secretary, the Prime Minister and the Minister for Europe for about 18 months on the proposals in the Bill. It is impossible for me to understand why a referendum on the broader landscape of the EU is not provided for, and I cannot understand why the Prime Minister continually reaffirms his commitment to this failing, unreformed EU project. I know that many other Members agree with me.
	By the same token, as the UK appeases the EU and Germany, so Germany pushes up the ante of a radical vision of deep fiscal and political union for the EU as a
	whole, while the ESM evolves into a full European monetary fund. That is why I argued in my article that we must refocus our trading relationship. The shadow Foreign Secretary referred to the single market as the answer to our questions, although I admit that he qualified that by saying that other things needed to be done, but, among those things, as I said in a pamphlet I wrote last year called, “It’s the EU, Stupid”, we have to refocus our trading relationship with the rest of the world, given the massive deficit that exists between us and the member states, half of which is with Germany itself. We have real options for trading with the Commonwealth and the Americas. Indeed, last year alone we ran a surplus of £36 billion with the Americas, yet the Bill re-endorses the nonsensical view of Europe adopted by the Euro-elite, and our acquiescence in the Bill is part of our failure.
	Only recently, 41% of German voters indicated to YouGov that they wanted to return to the deutschmark, and similar indications are growing in other countries, but with them are also growing dangerous moves towards the far right, which I constantly warned would be the consequence of breaking the rule of law in Europe and of creating the kind of situation we now face. Europe is in the throes of a massive schizophrenia, and at stake is not only the stability of democracy in Europe but of the stability of our democracy. In Germany and Ireland, the ESM is being taken to the courts—to the German constitutional court at Karlsruhe and to the European Court of Justice in respect of Ireland. I have to say, however, that past references of this kind give us little confidence that the legal route will solve the problem.
	The rule of law, on which this whole edifice is based, is constantly being broken, not only on the article 122-EFSM basis but in respect of the stability and growth pact, which was broken by Germany and France in 2003. This is a challenge not only to the interests of the UK and other member states but to the rule of law in Europe as a whole. I most strongly urge the Government not to proceed with this Bill, and as it proceeds I will strongly urge all Members of Parliament to vote against it.
	The treaty should have been vetoed, just as the Prime Minister rightly vetoed the fiscal compact. The figure of €500 billion or so that is being proposed has simply been plucked out of the air. Most serious commentators believe that the current crisis in Spain, Italy, Greece and elsewhere would need at least €2 trillion, and probably much more, yet it is simply not there. Given the evidence of the continually evolving euro crisis in those countries, €500 billion-plus—some suggest that the figure could be €700 billion—is peanuts compared with the billions that are wasted and is inadequate to deal with the problem that this failed European economic governance has created. It is about time that we put our foot down in this Parliament, because the issue affects those whom we represent in their daily lives and we increasingly gain so little from our deficit with the single market. In pursuit of their failed ideology, the euro integrationists call for more and more Europe, however much the problem lurches from one disaster to another. That is not remorseless logic; it is a remorseless path to disaster.
	It is said that under the European Union Act 2011 a referendum is not required unless it involves a new power or competence affecting the UK. What does it
	take to hold a referendum when a Bill actively encourages the European Union to implode, with dreadful consequences not only for Europe, but for the United Kingdom?

Denis MacShane: It is always a pleasure to follow the hon. Member for Stone (Mr Cash). He is the Private Frazer of our European debates. For nearly 20 years I have been listening to him saying, “We’re doomed! We’re doomed!”, “There’s no hope at all”, “Europe is schizophrenic”, “Europe is extreme”, or, “Europe is locked in riots and difficulties.”
	That is a good description, frankly, of our country. It is only 12 or 13 months ago that London was set ablaze for three days. The state completely lost control of the streets, and the rioting, looting and burning spread to other cities. We are now the recession queen of Europe. It seems that we are in a triple-dip recession. While the hon. Gentleman complains about the threat of inflation and the printing of money, we are the great printers of bank notes—it is known as quantitative easing—and we are printing them as fast as we can, just as the United States is. By comparison, the European Union is relatively restrained. It has been our banks—some nationalised still, some still in private hands—that have been going to the European Central Bank to avail themselves of cheap-cost euros, to the tune of several billion. My point remains, as always, that we are all in this together.
	I am not sure whether the hon. Member for Stone is quoted in Bundestag speeches as Eurosceptics there look for a friendly British voice to pray in aid, just as he assiduously reads The Economist and the Financial Times. Indeed, in the many friendly debates that I have had with him, both in this House and outside, he always has a quotation to sustain his case. However, as somebody who reads the German press a little bit, let me gently say to him that there are quotations and opinions like that bubbling up every day, just as there are in this country. The broad thrust of German economic policy is for stability and open markets. The notion that Europe’s currencies and Europe’s trade should be balkanised is of no advantage to the German economy at all. Far from creating an über-Germanised Europe, Mrs Merkel and the Social Democratic party—I was with some of its leaders at the weekend at a congress in South Africa—are very conscious of the fact that they carry a heavy responsibility. Part of the reason is that they took some tough decisions at the beginning of this century—to hold down wages, recapitalise industry, and transfer a lot of technology offshore to Poland and integrate the new EU member states into the broader German economic zone—while we, sadly, were over-fetishising banks. Now Britain is associated with LIBOR, the collapse of other banks and the great problem of illegal trading in offshore money in Mexico.
	We really ought occasionally to put a mirror in front of our noses before we patronise and condescend to other countries. We have always lent money to countries in need. We poured money into Greece in the 1940s after the war and in the 1950s to stabilise it. We did so again at the beginning of the 1960s, when there was a great deal of turbulence in connection with the end of British rule in Cyprus. That has always been a British
	tradition. Quite intelligently, we prefer to use our treasure rather than shed our blood when things break down in Europe.
	We are out of the current arrangement—this kitty of €500 billion. As the Foreign Secretary said—I could not find much to disagree with in his speech, and I am sure that the Bill will receive its Second Reading—we are not directly concerned. However, he went to such great pains to point that out that I thought he was over-striving for effect. Indeed, the hon. Member for Stone is absolutely right on one point: the so-called euro referendum Act, which the Foreign Secretary prayed in aid, is a piece of completely phoney jiggery-pokery. It gives the Secretary of State the sole, exclusive right to say whether there has been a significant transfer of competences or sovereignty to the wider Europe Union. If he alone decides that, he triggers a referendum; if he does not, as with this Bill, there will be no referendum. This is not about a referendum lock or allowing the British people or Parliament to have greater scrutiny or a greater say over European affairs; it is a completely cynical piece of legislation, which frankly is irrelevant to the broader European debate.

Bernard Jenkin: Does the right hon. Gentleman not think that there is an inconsistency in saying that we do not want a referendum on this issue, yet vetoing the fiscal union treaty in December? We are effectively consenting to the process of fiscal union by allowing the treaty amendment to go through almost on the nod, effectively abolishing the no bail-out clause, which will be the foundation of fiscal union.

Denis MacShane: The hon. Gentleman makes a fair point. The Prime Minister found himself, through no fault of his own—inexperience, 2.30 in the morning, exhaustion—thinking that he was speaking for half of Europe, but at the end only the Hungarians were left. We created a British-Hungarian empire overnight, and even they peeled off in the end. It was deeply embarrassing. I do not think the Prime Minister actually understood how European decision making works or how to present our case effectively. That is part of the price that the Government pay for opting out of any political engagement with European partners. Working in the European context is a learning curve. It is about building relationships, networking, trading, and give and take. At times, certainly, it is about stamping our foot and not allowing something to go through. Indeed, I was a witness to all sorts of European countries and leaders doing that when I was Minister for Europe. However, in this case the Prime Minister found himself not so much naked in the conference chamber as utterly alone, without anybody else in the slightest bit interested in anything the United Kingdom had to say.
	As a result, we will now move forward to a new treaty—the hon. Member for Stone is absolutely right about that. The German Government are quite determined. I was talking to a senior associate of François Hollande over the weekend, and the French now accept that quite soon we will be moving to a serious banking union—a serious treaty—that will do for banking what the Coal and Steel Community did in 1950 and what subsequent treaties did, in placing under broad supranational supervision a good and important chunk of the European economy. There is a huge debate about how far that
	process should go. Should it, for example, include the small regional banks and savings banks—the cajas, as they are called in Spain? Should banks be closed down, as happens quite regularly in the United States? When banks there are no longer able to stand on their own two feet, they are not bailed out—they are closed down.
	Some supranational authority is now being created, however, and the British banking and financial system will not be able to operate wholly independently of that authority, because banking systems are permanently intertwined. Anyone walking through the streets of Madrid, Munich or Geneva will see British high street names such as Lloyds and Barclays operating there. Those banks will come under the control of any banking union. The more we pretend to ourselves that we can stay out of that arrangement, the less influence and say we will have over the new rules as they come into being. That is what really worries me. The notion that expelling Greece from the eurozone and re-drachmatising, if that is the right word, the Greek economy—I always prefer to use a Greek term, so I prefer “grexodus” to “grexit”—will somehow save the British bacon is just foolish.
	The hon. Member for Stone is fond of citing YouGov polling in Germany. I did not know that YouGov—“Anything you want, guv”—was now a polling company in Germany as well. If we look at the Irish vote on the referendum to accept quite onerous conditions, we can see that they voted by 60% to 40% to stay in the euro, and any Greek polling will show a massive majority—up to 80%—in favour of staying in the eurozone. Those countries are mature enough to realise that it is their internal policies, not the existence of a currency, that lie at the heart of their economic difficulties. For example, there was no housing boom in the Netherlands, which had low-interest euros to play with, just as the Spanish and the Irish did. Why not? Because people in the Netherlands have to put between 5% and 10% down before they can buy a house or a flat there. In other words, economic, administrative and political decisions could be, and are being, taken in all the countries concerned.
	However, it is quite right to criticise those countries, and especially the accounting in Greece, where the shipping industry and the Greek Orthodox Church—the country’s biggest land and property owner—pay no tax. Greece spends twice the share of its gross domestic product as we or the Turks do on defence, rather than ensuring a clean taxation system. This moment of truth is, very painfully, forcing those countries to take new directions and new decisions, yet paradoxically, if for some reason the euro were to dissolve into drachmas, pesetas and lira, that would take all the pressure off the political and administrative classes in those countries to take new decisions.
	Yes, there will be enhanced supervision of those countries’ economies and budgets, but that also happened after the war as a result of the Marshall plan. Along with the credit from the United States came the Marshall planners—technocrats who sat in ministries to ensure that, in accordance with the broad remit of the plan, there was no improper abuse of the credit lines that the United States was providing.
	My plea is rather more philosophical. I feel sorry for the Foreign Secretary—who is not in his place— because he has consistently championed out-and-out Euroscepticism. He has encouraged all the false hopes.
	Let us remember his famous statement before the 2001 election, when he warned the British people that if they voted Labour, Britain would become a foreign land. That was about as sensible as the earlier remark made by the right hon. Member for Wokingham (Mr Redwood) that signing the treaty of Amsterdam would mean the abolition of Britain. We have constantly been told by leaders of the Conservative party that being in Europe was bad for us. The hon. Member for Stone presents the most brutalist version of Conservative party thinking, but he is swimming in the same sea as many members of the Cabinet. He is simply rather more honest in describing the endgame that he wants to see.
	I am fundamentally opposed to that aim; I do not want to see the eurozone break up. The entire western liberal market-economic world is going through a great crisis, as evidenced by problems in America and China, but there is a wider crisis, as evidenced by the difficulties in India, Russia, China and even Brazil, whose economy is now slowing down. How we get out of that is a huge challenge for all of us, but it is naive in the extreme to suggest that dissolving the eurozone would present a magic solution that would instantly liberate productivity, growth and employment and ensure the disappearance of extremist parties so that all the nation states could enter into a happy-clappy relationship.
	This debate signals the firing of the first serious shot in what will be a much greater debate in our nation. The €500 billion in the kitty to bail out distressed countries sounds like a lot of money, but it is actually very small beer. We are going to have to take much bigger decisions about the future of Europe.
	Over the summer, I was concerned to see a lot articles in the European press saying that Britain was about to withdraw from Europe. The language of repatriation and referendums was being used and, for the first time, a British Prime Minister said that he had no problem with linking the word “referendum” with Europe. He might not have any such problem, but neither Lady Thatcher nor any other British Prime Minister has used that language since Britain joined the EEC in 1973. Those headlines were appearing all over Europe, however, and the Minister for Europe, the right hon. Member for Aylesbury (Mr Lidington) had to be rushed out to comment on them. I was leafing through my copy of Le Monde one day and I was surprised to see his by-line in it; I thought I had an exclusive franchise to write in that newspaper. He said that Britain was not going to leave Europe, and that we were very committed to the EU. I have not brought the article with me, so I cannot read it out. Dagens Nyheter in Sweden said the same thing.
	The Government went into total panic mode as they realised that a lot of people in Europe thought that the hon. Member for Stone spoke for the Conservative party, and that we were on our way out—[ Interruption. ] I hear cheers and “Hear, hear” from the Government Back Benches. I am delighted that we now seem to have buried the proposals for boundary changes, so that all those right hon. and hon. Gentlemen can perhaps be returned to the House at the next election. They will then have to make big decisions, however, on whether Britain should remain part of this thing or not. We are approaching a fundamental turning point in our nation’s life. I remain firmly committed to our staying a partner
	of the other countries in Europe, although I agree that there are huge problems to be resolved, and I agree with a lot of the reform agenda that is advanced by right hon. and hon. Members on both sides of the House.
	The Bill gives the first flavour of the much greater debate that is about to come, but the Conservative party seems wholly ill-prepared for the seriousness of some of the decisions that we are going to have to take in the next two or three years. I am confident that, with greater study and work, our eminent shadow Europe Minister and the Labour party will become fully prepared to take part in that debate, but I fear that the possibility not just of a “grexodus” but of a British exit is now seriously on the table. We would be foolish if we did not accept that Britain could now be on the point of taking a fundamental decision that would significantly alter the nature of our lives and our nation.

George Eustice: I should start by saying that I agree with much of the analysis of my hon. Friend the Member for Stone (Mr Cash) about what is wrong with the euro and how we got to this situation. However, I disagree strongly with his conclusions about this Bill, because I think it is relatively uncontroversial. As the Foreign Secretary pointed out earlier, the new European stability mechanism is certainly an improvement on the European financial stabilisation mechanism which went before it. Under that previous arrangement, Britain was liable for some 15% of the liability, which could have been a bill of up to £9 billion, whereas the new ESM means that Britain will not be taking on any future liabilities. So, first and foremost, this is a step forward.
	Secondly, we must bear in mind that the Bill is not about the establishment of the ESM itself; it is simply about the amendment to article 136. This is just about clarifying the legal basis on which the ESM is set up, and discussion is taking place about whether that even needs to happen, as my hon. Friend the Member for Stone pointed out. This has already been happening under article 122, and it is apparent that it is mainly a concern of the German constitutional court that has prompted this change. The one thing I would say is that if other European countries or all 27 member states are going to acknowledge the concerns of one member state—Germany—by amending the article to reflect its needs, I look forward to the day when that will be reciprocated. I look forward to those moments when Britain is in a minority of one in having concerns about some things European and that, too, is respected by the other member states.

Bernard Jenkin: I cannot quite believe what I am hearing, because a criticism that my hon. Friend and I have regularly made of the European Union is that what we are categorically assured will not happen then happens, and when we amend the treaty just to tidy up the wording, that makes it more explicit that it was always intended to happen in the first place. May I just read to him what the no-bail-out article actually says? It says:
	“A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of another Member State”.
	That is what the treaty says now and he is supporting, by a sort of sleight of hand, that being negated and set aside simply because it has already happened illegally. Is that not the grandmother’s footsteps of European integration that he and I have always railed against?

George Eustice: I would simply say to my hon. Friend that Britain is not bound by the ESM; it is very clear that only eurozone member states will be affected. Is it proportionate for us to stand in the way of those countries that are wrestling with and trying to decide what is going to happen with the euro? Is it proportionate for us to block that particular tweak to that treaty? I just do not feel that it is. I agree with him in that I want renegotiation and I want it, at some future point, to be put to a referendum. However, we need to pick our battles and pick our moments, and I think it is wrong to nit-pick over what I would regard as a small change.

William Cash: My hon. Friend was kind enough to say that he agreed with my general analysis of the problems that have led, through the treaties, to the difficulties that the European Union as a whole now represents. That explains why giving more money to this particular fund and doing it in this manner is likely to exacerbate the deep black hole that has already been created. That is why it affects us; it is because we trade so much with the European Union.

George Eustice: My hon. Friend makes a point that I was going to deal with. I simply return to what my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) said, as I do not think that by blocking this Bill we are going to stop the ESM. Other countries will continue, because they have decided that they need to do so to try to save the euro.
	We also need to give the Government and the Prime Minister credit when they achieve things and make progress. My hon. Friend the Member for Stone and I would like to see faster progress made and a renegotiation sooner rather than later, but we should give the Government credit where they safeguard British interests and improve on the situation we inherited. We should not blame our own Government for the mistakes the previous Labour Government made. They engaged in sloppy negotiation, and, as a result, we ended up with the former arrangements in the EFSM. The situation has now been improved with the ESM and we should support that.

Bernard Jenkin: Where is the consistency in the Prime Minister’s vetoing fiscal union at 27 in December last year and now implicitly consenting to it by scrapping the no bail-out article? Should we not be extracting a real concession? Should we not be getting the concessions we really want? Should we not be using this opportunity as a fulcrum for renegotiation? Is this not the moment—when these countries want fiscal union to support monetary union—to say, “This is what we want to pull back in return”? Instead, we are just giving this away, and for what?

George Eustice: I think that there is a big difference between the fiscal compact that we vetoed last December and this particular one. Again, this comes back to the point about what is proportionate. By vetoing that fiscal compact, Britain was sending a clear signal that we were not going to be part of a wider decision at an
	EU level for those types of fiscal integration, because we were not affected. That approach was absolutely right on a number of levels. First, it showed that Britain was serious and that, on these issues, when we said we were going to do something, we meant it and we were ready to use a veto. That will help us when it comes to budget negotiations.
	Secondly, by vetoing that particular treaty at an EU level, the Government managed to limit its scope, because it was, thus, necessarily just about the eurozone members and it cannot affect the UK. Had we signed up to that particular treaty, we would have faced all sorts of threats and demands, and people trying to put other agendas on the table. We would have had months and months of wrestling over things we did not want, before we would probably finally have had to veto it in any case, so I think that we did the right thing. However, I am just not convinced that such an approach is right in this instance, for the reasons I have set out. As I say, I think it would be disproportionate, as the ESM is not going to affect the UK; there is nothing that will expose us to future liabilities. Would it be right for us to stand in the way of countries that think that it is the right thing to do? There is a question of whether it is the right thing, but would it be right for us to stand in their way?

Mark Reckless: My hon. Friend refers to our having vetoed the fiscal compact, but is it not going ahead? Are we not acquiescing in the use of the European institutions to enforce it, just as proposed? How does that increase our credibility in budget negotiations?

George Eustice: I would hope that my hon. Friend would agree that it was right to use the veto. We need a bit of a culture change in the Foreign Office, as has been alluded to. Historically, there has been too much of a sense that we need to have a seat at the table at all costs. That has been a mistake, it has been the wrong approach and using the veto in that instance was right. I return to what I said about a veto not being proportionate in this case. As I said, my conclusion is probably and, given the subject, extraordinarily, closer to that of the hon. Member for Cheltenham (Martin Horwood)—this is a step forward from the position that we inherited from Labour and we should recognise that.
	It is encouraging that the European Union Act 2011 has had an effect for the first time, as the proposal we are dealing with requires an Act of Parliament. My hon. Friend the Member for Stone made some comments about that legislation, but again we need to give credit where credit is due. It is a major step forward, as it puts the UK on a similar footing to countries such as Ireland and Denmark, in that it will trigger a referendum automatically where there are any transfers of power. None of the Maastricht, Nice and Amsterdam treaties would have been able to go through without triggering a referendum. Perhaps Conservative Members are sometimes guilty of underestimating the significance of that, because it is a major step forward and likely to force what my hon. Friend and I want, which is, at some point, a proper renegotiation of Britain’s relationship with Europe and a new settlement. I say that for the simple reason that other countries are pulling in a direction that we will not follow and the British public’s chance for the first time to say, “We will not follow” will force a new settlement and the sorts of negotiations that we want but that have eluded us for far too long.

William Cash: I might have agreed with my hon. Friend that the general sense of direction would lead to the conclusions he has drawn, but is he not conscious of the fact that Angela Merkel is now proposing a new union treaty—full political union and all the panoply that goes with that—which is likely to come forward in December?

George Eustice: It may come forward, but there will be better opportunities than this Bill to pick the moment to have that negotiation. This is not the Bill or the issue on which to say to other European countries, “Unless you give us a full-scale renegotiation, we are going to veto the proposal.” It is disproportionate to take that approach in this instance.
	So much for the areas on which we disagree. I want to come on to some of the areas on which we are probably in agreement and to echo some of the points made. There is a big question about whether the ESM will be a solution to the crisis, or even part of one, and there is also doubt about whether there is any solution to the crisis gripping the eurozone. Although, as the Foreign Secretary said earlier, the polls in all the countries in the euro consistently show their wanting to stay in the currency, in reality they do not want to take the decisions or accept what the euro inevitably entails. That is where the real problem lies.
	Let us consider Germany, for example. It is undoubtedly benefiting at the moment, almost freeloading on the other member states and enjoying a lower exchange rate than it would have if it had its own independent currency. The Germans have kidded themselves into believing that it is all down to German ingenuity and marvellous engineering, and granted they have made some improvements in their labour market and sorted out some of the structural problems in their economy in the past decade, but German industry is undoubtedly benefiting significantly from having a lower exchange rate than it would otherwise have. Meanwhile, countries such as Greece and Spain do not want to do what the euro entails in terms of fiscal discipline and so on. They have spent, borrowed a fortune and shown a complete lack of prudence over the past 10 years. Although such countries say that they want the euro, they do not want what the euro means, which is a real problem.
	We should not stop member states trying to save the euro. If they want to save it and want to make that attempt, let us let them do it. I think the most likely scenario, however, is that the euro will be partially broken up and some member states will be allowed to leave it. Although I can understand that the Government would not want to entertain any such talk or to spook the markets by commenting on that idea—I do not expect the Minister will do so when he wraps up the debate—I hope that they are developing some serious contingency plans for handling a break-up of the euro, whether it is orderly or disorderly. Despite all the rhetoric when the euro was introduced about its ending volatility and being all about stability and stable growth, we might find that the conditions for stability and stable growth are best created by floating exchange rates, which can help countries adapt to shocks to their economies and changes in the world economy as well as to transition when things go wrong.
	I was in the anti-euro no campaign and worked for it for four years, and I remember that a decade ago, when that debate was going on, many people who are now on
	the Opposition Benches—the right hon. Member for Rotherham (Mr MacShane), who is no longer in his seat, was one of them—accused us Eurosceptics of putting our heads in the sand and of saying, “Stop the world, I want to get off.” Who are the people who have their heads in the sand today? Who is in denial about the realities, particularly the financial realities, of the world in which we live? The fact is that the euro was an incredibly stupid idea. It was introduced only through a triumph of political belligerence on the part of people such as Chancellor Kohl and François Mitterrand over economic reasoning.
	Economists at the time pointed out all of the problems that have later come home to roost. They warned that there was a lack of convergence and that that was not just about the cyclical convergence of one’s economy and the levels of growth but, more fundamentally, about structural convergence, the make-up of one’s industries and the differences between economies. They were ignored. They warned that we would get asymmetric shocks to the world economy that would hit some countries worse than others, which would cause tensions in the euro, but they were ignored. They warned that to work properly the euro would require fiscal union and fiscal integration, that it would require very painful long-term adjustments in the absence of an exchange rate that could help people through those adjustments, that countries on the periphery would face prolonged periods of high unemployment and would be forced to cut wages, and that we would have to accept large migrations of people within the European Union from deprived areas to areas that were succeeding under the euro. Those warnings have all come true, but they were all dismissed at the time.
	The final thing that everybody pointed out when the euro was debated was that we needed political union to make the euro a success, so that there was clarity in decision making. That has been proved right, too, because despite the warning from those on the pro-euro side that we would not have a seat at the table, all we have at the moment is 17 member states around a table squabbling and unable to reach a clear and coherent decision. That is one reason the euro continues to limp forward.
	We need to learn the lessons. Why were all those economists ignored? Why was there so much mindless, blind faith in the idea that the euro was somehow historically inevitable? We still see that from some Members on the pro-euro side. The lesson we must learn is that nothing is inevitable. It is not inevitable that the euro will survive, but nor is it inevitable that it will collapse. The idea of ever closer union is certainly not inevitable any more and it is not inevitable that Britain will always be alone as the only country on the outside talking sense. I think it is quite likely that we will gain allies and that our ideas will start to gain traction.
	There was a failure under the previous Labour Government and the truth about new Labour is that an unquestioning pro-Europeanism was almost an article of faith. Anti-Europeanism was blamed for the fact that they were not elected during the 1980s and that association was targeted at people such as my hon. Friend the Member for Luton North (Kelvin Hopkins), with whom I have campaigned on this issue many times. That perspective on Europe was very unquestioning and unprincipled. It was simply a political line to take, with
	no intellectual rigour, and it led to Tony Blair and the previous Labour Government simply going with the flow on whatever emerged on the European agenda.
	This Government have made a very good start. The European Union Act 2011 was much more significant than many people on the Government Benches give it credit for, but we need to develop it and to build on what has been achieved to forge a new doctrine for the future of the European Union. That doctrine must end the dogma of ever closer union and encourage the idea of a multi-tier Europe—a pick-and-choose Europe where countries are able to adopt the policies they want and withdraw from those that they do not like and do not work for them. Too often in the past, we faced the problem of people saying that we would not have enough allies to make a point because there were not enough countries to support us. We need to leave such attitudes behind, because unless we begin the debate now we will never end up in the right place. We should be articulating a proactive vision of an alternative European Union, which does not require deeper integration in one direction.

Mark Reckless: My hon. Friend says that unless we begin the debate now, we will not end up in the right place. Has not the debate been going on for more than 20 years? Is not a decision needed to give the British people a vote on whether or not we stay part of it?

George Eustice: My hon. Friend knows that my position on a referendum is that there should be one, but that it should be after a renegotiation, not before. I do not agree that we should have an in-or-out referendum on the European Union at this point. I think that we should negotiate new terms with Europe and then put them to the country in a referendum, because that is what the majority of people in this country would support and want. In having a referendum, we must not deny the majority of people in this country the choices they would make.
	I agree with my hon. Friend that many of us have been having such a debate, but that position was not adopted by the previous Labour Government, for the reasons I have just explained. Their policy was to go with the flow and they simply took a line that meant accepting all things European as a political doctrine rather than holding any kind of coherent, rigorous view about what the European Union should become. We must get over the weakness and insecurity of the obsession with having a seat around the table and instead start to articulate some clear ideas about what we want the European Union to look like in the future. We should be clear that it is our European Union, too, and that we do not care whether we are in a minority initially in making some of those arguments.

Kelvin Hopkins: It is a pleasure to follow the hon. Member for Camborne and Redruth (George Eustice). I agreed with much of his speech, particularly his emphasis on the desirability and common sense of flexible exchange rates—not necessarily floating exchange rates, but flexible exchange rates, at the very least, so that countries can choose and negotiate currency arrangements that suit their economies. If all countries can do that, they are free to reflate their economies and to drive growth, so everybody benefits. That is the great
	advantage. Co-ordinated reflation was a slogan that many of us on the Keynesian left called for back in the 1980s. Indeed, co-ordinated reflation would be desirable now, but we have co-ordinated deflation—savage deflation whereby people wonder why the economies of the world are getting into difficulty. It is because Government after Government are cutting deficits, driving cuts and deflating their economies. There is quite a lot that we in the debate have in common.
	I should make two points before proceeding. One is to emphasise my support for the strong view put by the Minister for Europe—and indeed by my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander), the shadow Foreign Secretary—that civil servants should remain non-political. It should be Ministers who are accountable and Ministers who are political. Ministers, as well as Members of the House and politicians, should make political statements, not civil servants. The great tradition of non-political civil servants for whom Ministers are responsible should be preserved and given strong support. We should not accept the contagion of the officials in the European Commission, who are politicians in the guise of officials who drive policies themselves. Our civil servants are not like Commission officials, and we should not let them drift in that direction due to the contagion they experience in Brussels.
	I shall not speak for long, but I want to emphasise that we are in serious difficulty—not just in Britain, but across the European Union. It is my view that the euro will ultimately not prevail and will not last simply because it cannot work. Countries cannot constantly deflate their way to success. There will come a point at which Greek people will realise that it is the euro that is their problem. Some on the left think that now, but many others will come to that view.
	When Greece is able to escape from the euro, re-create the drachma and devalue substantially, people will find imports too expensive and what they spend will be directed to the domestic economy, which will help their domestic economy to grow. Greece’s exports include tourism and holidays, and when Greek holidays drop to half the price they are now, many more people will have holidays there.

Denis MacShane: I am following the argument, but will my hon. Friend explain why the British pound experiencing a severe devaluation of up to 25%, or perhaps nearly 30%, of its value in the past four years has led to a worsening balance of trade and an increased recession? If devaluation of a currency is the magic recipe, why has it not worked for us?

Kelvin Hopkins: There is a case that we still have not depreciated our currency enough, but demand for our exports is falling because there is deflation elsewhere, particularly elsewhere in the EU. We should consider the history of devaluations; the proper ones have invariably been very beneficial. After the escape from the exchange rate mechanism in 1992, the economy bounced back strongly and many Conservative Members would agree that, had they managed to stay in office for three or four more years, people might have realised that that big devaluation was driving economic growth and falling unemployment. We reaped the benefit of the collapse and what happened in the ERM, particularly in my
	constituency, which was the epicentre of housing repossessions and negative equity, which led to my having one of the largest swings to Labour in the country, simply because of the ERM.
	I was one of the few people who wrote about economics in 1990 who were saying that the ERM would be a disaster. I predicted—I surprised myself, indeed—the precise course of that experience and said what would happen in the end: interest rates would go through the roof and eventually we would come out of the ERM and devalue, which we did. However, that is not the point that I am making tonight.
	I agree with the hon. Member for Stone (Mr Cash) on many things, but I do not agree with him on economic policy. I doubt that many Conservative Members read the New Statesman, but in the last week or two it has featured a series of economists who initially signed a letter of support for the Government, but are now recanting, saying that they made a mistake and should not have called for deflation and cuts. They are implying that that situation ought to be reversed. I agree with them, and I was one of the few in the House who absolutely and profoundly disagreed with the Government from the beginning, quoting Paul Krugman and others, who said that they were going in precisely the wrong direction, towards the savage deflation that led to the 1930s’ depression.
	We are in danger of going in that direction now. Countries have to find a way to expand their economies, and they will not do that when they are stuck in stupid arrangements such as the euro. We must have a deconstruction of the euro. There is much talk of an uncontrolled crash, but currency zones can be deconstructed rationally. When the Soviet Union collapsed, all the countries of the ex-Soviet Union created their own currencies. That was done fairly straightforwardly. When Slovakia and the Czech Republic separated as Czechoslovakia broke up, they created their own separate currencies. That worked. It can be done in a controlled and not-too-difficult way. I shall not say that it will be that easy, but it is not impossible and there are examples of such a thing happening. I suggest that, initially, Greece, and perhaps one or two other countries, ought to quit the euro and recreate their own currencies. That might mean freezing banks for a few days and so on.

Michael McCann: I am following the argument closely, but can my hon. Friend explain himself? He is talking about countries that came from an impoverished state, so the only way was up. Surely the problem with the eurozone is that we are talking about countries that have experienced high standards of living. Ultimately, any break up would mean that those would go down.

Kelvin Hopkins: Standards of living ultimately depend on productivity. If a country produces wealth it can consume wealth. If those countries get into a position whereby they can start to rebuild their economies and expand growth—have more people going on holiday to Greece, for example—they will bounce back and become better off again. I have said many times, in writing and in the House, that strong currencies derive from strong
	economies, not the other way round. If a strong currency is imposed on a weak economy, it will drive that economy down.
	Finding a way to get that economy to grow, which might initially mean a devaluation, means that the currency will ultimately strengthen. Indeed, the 1944 Bretton Woods conference made arrangements that allowed for countries to depreciate or devalue their currencies as necessary. Indeed, if Keynes had had his way, he would have had countries required to appreciate their currencies. I suggest that Germany ought to be appreciating its currency and not be allowed to get away with what it has done for decades, which is to undervalue its currency. That has meant that it has had a competitive advantage against every other nation in the EU, and indeed in Europe.
	If the euro were to be deconstructed, a major consequence would be the new deutschmark appreciating quite substantially. There are now worries even in countries such as Denmark and Finland. Finland, which is in the euro, would be forced upwards to a currency valuation that it found uncomfortable. The Danes have chosen to peg their currency to the euro. They might think again about devaluing, but Germany has, effectively, an undervalued currency relative to all the other countries of Europe, which is a fundamental component of its economic success. That is an unfair way to operate and we ought to address it.
	I am pessimistic about the future of the eurozone. At the moment, there is a kind of “quietism”. People in the EU are trying not to talk about all the terrible things that are going on, but as I understand it from my friends on the continent, what is effectively a giant building society in France was last week on the verge of having a run—going bankrupt and people taking their money out. The French Government effectively nationalised it and pushed €90 billion into it to save it. That has just happened to President Hollande, but people do not want to talk about it too much because they know that there are many other problems of that kind. There is a Franco-Belgian bank into which €50 billion has been pumped to keep it alive. Indeed, even German banks have lots of supposed assets that are not really assets; they are IOUs that will never be repaid. If I claimed that people owed me £100,000, but I knew that they were all poor people and would never be able to pay me, that would not be an asset of £100,000, but a worthless IOU. A lot of banks are stuffed full of worthless IOUs; that is the reality. It is only when countries start to manage their economies effectively on a national basis, with an appropriate currency value and appropriate interest rates, that they will start to recover. Many of the poorer countries will never be able to compete within the euro, and ought to get out fairly soon and re-establish their own currency.
	Take the case of Ireland; I have many Irish constituents. The reality is that Ireland is part of the British economy more than anything else. It should be part of the sterling area, but it is overvalued relative to sterling. If it recreated the punt, devalued and came into line with sterling, Ireland would benefit enormously, because we are its major trading partner. I hope that will happen, because it will benefit many of my Irish constituents and their relatives in Ireland. I look forward to common sense ultimately prevailing, but I have a feeling that we will go through an awful lot of pain before that happens.

Mark Reckless: Today we are agreeing to treaty change, yet we are getting nothing in return. In December, the Prime Minister, at an EU summit, told us that he was vetoing the EU treaty because, while this country supported the eurozone putting in place what it needed to in order to make the eurozone work, to the extent that that is conceivable, this country required something in return for our agreement to that EU treaty change: protection for our key national interest—the City of London. In particular, we wanted all future financial regulation to require unanimity, rather than a majority vote. We have not received that protection for the City of London, yet today we are agreeing to treaty change—without getting what we said we required if we were to support that treaty change.
	It is not as if, through that agreement, we got out of using the European financial stabilisation mechanism for Ireland, to which we gave a bilateral loan, and for Portugal, to which we did not, and where the use of the EFSM was simply nodded through. It is the position of many in the House and, as far as I can discern, of Her Majesty’s Government that the use of article 122 and the setting up of the EFSM was not a proper and legal action under the treaties, yet it inflicted on this country a liability of €26.5 billion in respect of Portugal, to be shared through the EU budget, with our share being about 13%. That liability will still, under this arrangement, accrue to this country.
	Article 122(2), the “natural disasters” clause, which was used to justify making the EU budget and this country liable for supporting member states that have the euro—a currency that we chose not to join—is still in the treaties. Unlike article 136, it is not amended through use of article 48(6) provisions. It could potentially be used once more. I fear that the chance of it being used in future has been heightened by the way that we have dealt with the issue. We agreed to its use at the summit in May 2010. I say “we”, but I cannot go much beyond that, because the Government refuse to release the details of what happened, within the Treasury and beyond, in the period when the coalition Government were being formed and there was a caretaker outgoing Labour Government.
	The previous Chancellor has said that he decided that we could not stop use of the provision, and therefore had to agree to it. He states that the current Chancellor raised the radical prospect of us abstaining, but we none the less supported that use, which I believe we hold to be unlawful. My hon. Friend the Member for Camborne and Redruth (George Eustice) referred to shoddy negotiation, but who was conducting that negotiation? In this case, as there was a transitional caretaker Government while a coalition Government was being formed, and a lack of clarity among the political participants on who said and did what when, it is perfectly proper that those very senior civil servants who were conducting the negotiations, preparing the Government line, and advising on whether such action was a lawful or proper use of the treaty, should be held to account, ideally through the Government releasing the relevant documents, which will show who was responsible, and whether the action was agreed by us or the previous Chancellor, or whether it was something that largely happened through officials and their interfacing with officials in other EU countries.
	The hon. Member for Luton North (Kelvin Hopkins) is absolutely correct to draw attention to the worrying trend of officials in this country taking a position that is properly that of politicians, and of being infected by practices in some EU countries and in the EU institutions. We must put a stop to that. If officials trespass beyond the role that they have traditionally had in this country, they should not be surprised if they are criticised in this House and elsewhere in political discourse. If the Government were so strongly against what was agreed and how we became part of the EFSM, why did they promote the official who was at least a key cog in conducting those negotiations, and make him our permanent representative in Brussels, and why does the House not have a say in our foreign policy when it comes to what is perhaps the single most important diplomatic appointment, particularly in terms of the ramifications from the EU for our domestic law? Why was that appointment not put before a Committee of this Parliament for it to decide on?
	Not only have we promoted the individual to whom I have referred, but we have not challenged the decision to set up the EFSM under article 122. My fear is that while that treaty article remains in force, it could be used again, and we have gained nothing in return for making this treaty change. We heard from the Prime Minister in December at the summit that we supported the eurozone taking the action that it needed to; in return we were not to have the major, full-scale renegotiation to which my hon. Friend the Member for Camborne and Redruth referred—we were simply to have one demand met: the City’s financial regulation should henceforth be decided on by unanimity, not majority. We did not get that, yet we have given way in a craven fashion, and are pushing this treaty change through the House.
	Let us look at the decision, which is headed “European Council Decision of 25 March 2011 amending Article 136”. Paragraph (4) says:
	“At its meeting of 16 and 17 December 2010, the European Council agreed that, as this mechanism is designed to safeguard the financial stability of the euro area as whole, Article 122(2) of the TFEU will no longer be needed for such purposes. The Heads of State or Government therefore agreed that it should not be used for such purposes.”
	Surely what the decision says about the EFSM applies equally to the European financial stability facility, which was set up, albeit on a temporary basis, with an ostensible capacity of €440 million. That was designed for the eurozone and fits all the criteria, yet the EFSM was still set up. I am afraid to say that after that date, we saw use of the EFSM nodded through, by Ministers responsible to the House, with regard to Portugal. In the case of Ireland and the €22.5 billion use of the EFSM, we chose to have a bilateral loan; the arguments there may have been somewhat different. In the case of Portugal, we made no bilateral loan. We do not have the same close economic ties as we do with Ireland, yet we allowed the EFSM to be used for €26.5 billion in the case of Portugal.
	We put a stop to the use of the EFSM not because of the European Council decision, but because of the actions of this House, following a debate that I secured from the Backbench Business Committee on a “stop the bail-outs” motion after the Portuguese bail-out was nodded through. Following that, I am pleased to say,
	the Government found some rigour, stood up for this country, and made it absolutely clear to our European partners that there could be no further use of the EFSM, for example in respect of the further Greek bail-outs. Thankfully, we still have, within that mechanism, €11.5 billion that has not been used, perhaps €2 billion of which could accrue to this country. I thank and praise the Government for their work in that area, at least, and for listening to the House and to the debate that we had. But the problem that the Government have—I raised this with the Foreign Secretary and tried to prise an answer out of the shadow Foreign Secretary on it as well—is what does the decision do in respect of article 122 and the EFSM? It seems that the Government position is, “Oh, we’re getting this great deal in return for our agreeing to the setting up of the permanent stability mechanism. The other side of the coin is that we are released from further obligation under the EFSM and there is an agreement that the EFSM will be used no further.” The Foreign Secretary told us that the decision reflects that agreement in its recitals.
	The problem is that if that is the case, under the terms of the European Union Act it is not lawful to approve this in the way that we are seeking to do through legislation. The Foreign Secretary issued his statement under section 5 of the European Union Act 2011—or it may have been the Minister for Europe who did so; the version that I have is unsigned—and it states:
	“Section 4(4)(b) of the Act”—
	that is, the European Union Act 2011—
	“provides that where an Article 48(6) decision relates to the making of a provision that applies only to Member States other than the UK, it is deemed to fall outside section 4.”
	That is accepted. The statement continues:
	“The Treaty change provision contained in the Article 48(6) Decision does not apply . . . to the UK.”
	So what? The legislation does not refer to the treaty change provision contained in the article 48(6) decision. It refers, as the previous sentence correctly states, to section 4(4)(b) of the Act and an article 48(6) decision. If one refers to that article 48(6) decision, it has a heading relating to the stability mechanism. The Foreign Secretary told us that the decision is reflected in its recitals, and I would be interested to hear whether the Government consider that a decision includes its recitals or not.
	The burden of the Foreign Secretary’s speech was the great gain for this country and the fact that the decision that we are implementing tonight would somehow get us out of the EU-wide bail-out and prevent the EFSM from being used. If that is the case, it applies to this country.

Jacob Rees-Mogg: I am fascinated by my hon. Friend’s argument, which is put with great coherence but I think has one flaw—that is, if something affects the United Kingdom to the extent of zero pounds, it is essentially sophistry to say that it is affecting the United Kingdom. I think that is what my hon. Friend is saying.

Mark Reckless: My position and my analysis of the situation is that article 122(2) of the treaty has not been changed. There is nothing to stop another EFSM being set up. The Government’s position, as I understand it, is
	that the decision that we are ratifying tonight not only sets up the permanent stability mechanism, but releases this country from further potential liability under article 122. To the extent that that proposition is correct, it does affect this country, and what the Foreign Secretary states with reference to section 4 does not apply.

Jacob Rees-Mogg: To the extent that it affects this country, surely it is a negative effect—the UK will not in future be liable, rather than any liability or obligation being created for the United Kingdom. I accept that we are arguing about angels on a pin-head, but I do not think that on the understanding of the 2011 Act, that can be deemed as affecting the United Kingdom.

Mark Reckless: What the Foreign Secretary has chosen to do in making his statement under section 5 of the EU Act is to rely on section 4(4)(b). That is the basis on which he came to the House, and clause 1(3) states that the section 4 provisions mean that we do not need a referendum. However, the statement—officially put by the Foreign Secretary or the Minister for Europe—refers to section 4(4)(b) of the Act and an article 48(6) decision. That is then elided, with the next sentence continuing that the treaty change provision contains this article 48(6) decision. That seems to imply that while the article 48(6) decision would allow this not to apply to the UK, actually, if one looks at the 48(6) decision, according to the Government and according to the recital, it prevents article 122 from being used in the future as it has been in the past.
	Therefore the reliance on section 4(4)(b) would not be valid, so either, as I say, we are getting nothing in return for agreeing to the treaty change, or article 122(2) will no longer be able to be used to make the UK liable for bail-outs, in which case the Government’s statement as to why we are not having a referendum and why section 4 does not apply is incorrect, and we are acting unlawfully.

Michael McCann: Hon. Members on both sides of the House will be delighted to know that I do not intend to quote any legislation, which the hon. Member for Rochester and Strood (Mark Reckless) has just gone into in some detail. I support the Bill and I believe the European stability mechanism is necessary.
	I agree with my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander) that the need for action is beyond doubt, but I certainly do not delude myself that the two clauses in the Bill will paper over the massive crack or the massive problem that we have in Europe. If I may misquote Groucho Marx, there is no sanity clause, which is sorely needed. Yes, we need stability for Europe’s banks. We need to correct the balance between austerity and growth, and we need a bigger firewall to protect Europe from the economic problems that it faces.
	One aspect that has not been touched on, or has been touched on but not in the way that I would put it, is the north-south European disconnect. For part of my previous life, I was a trade union official and negotiated with colleagues in various parts of the European Union. There was always a disconnect between those in the north and those in the south. The hon. Member for
	Camborne and Redruth (George Eustice) put that in a different way, but there was always a necessity for members attending meetings from the north to get to a solution, agree a way forward, and move on that solution and that way forward, whereas the tendency for our southern neighbours in Europe was always to try and put off the day for a decision to be made, circumnavigating the need to make a decision. It may have taken several meetings to get there, but we eventually reached a conclusion. That north-south disconnect in Europe has not been properly addressed by leaders across Europe. It is something that we have to look at very carefully.
	I also think that Germany needs to step up to the plate in a significant way. We have heard from more than one Member this evening that Germany gets all the benefits of the euro, with regard to how its currency is valued, but does not seem to want to make its contribution to the solution, so that debate must be resolved, first in Germany and then at the eurozone level.
	Another element that must be looked at carefully is the balance between austerity and growth. When I intervened earlier on the hon. Member for Stone (Mr Cash) he replied—surprise, surprise—by putting his hand in his back pocket and pulling out, “Well, it’s all your fault because the Opposition gave us this massive deficit.” I do not want to go into all that again, other than to say that I am sure that he was not suggesting that when the previous Government bailed out the banks, which prevented us moving from a recession into a depression, the hon. Members now on the Government side of the Chamber did not support that necessary action. If I may paraphrase a gentleman I heard speak last week, the former Governor of Florida, the Republican Jeb Bush: “Don’t blame us for mistakes made on your watch.” That was a Republican talking to the Democrats in America. The coalition Government must recognise that since they took over our borrowing has increased by over £150 billion and that, therefore, there is at least an arguable case that their balance between austerity and growth might be wrong and might need to be recalibrated.
	The hon. Member for Cheltenham (Martin Horwood) asked the hon. Member for Stone and the Eurosceptics how we will solve this problem if not in this way, but answer came there none. I do not agree with the analysis of the hon. Member for Stone of how Germany got into its problems in the 1930s because my recollection, as a former student of history, is that it was the reparations imposed at the treaty of Versailles that created Germany’s inflationary problems and that they were not connected in a wider way to Europe, aside from the fact that it was the allies, of course, who forced the treaty on a defeated Germany after the first world war.
	I will put the question again: what do those who do not support this proposal think will happen if the eurozone is unceremoniously collapsed? People have predicted—I feel that it is a proper prediction—chaos, carnage and colossal damage on our streets. What would the streets of Europe look like? Much more has to be done in the euro area to resolve the crisis. There will be no painless solution but, just as the bank bailout prevented our country moving from recession into depression, the support of the ESM can and must be a starting point for a more permanent solution to the problems of the euro area.

Neil Carmichael: It is a great pleasure to speak in this debate, although I have been thinking about déjà vu situations, not least because we have discussed this subject in some detail in the past, and then I started wondering where the holidays had gone—I am still wondering about that. However, it is an important debate and it is well worth giving the matter further consideration. The Government are absolutely right that we have had a motion but should now also have a belt and braces approach and a Bill to ensure that this is properly embedded in the parliamentary system and that we understand what is being done by passing this legislation.
	I want to remind Members, as I have often done, about certain visits I make to meet businesses in my constituency. Many of them trade with the European Union, but they never really mention the problems because they are really quite pleased to have a free market and take it as read that that is a good thing. They are grateful for any improvements we can make to the single market, and I would like to see improvements such as the expansion of the single market to services and energy, for example. The firms I visit are good examples of why we should be concerned about the future of the euro and keen to ensure that the single market and our trade with the European Union continue unabated.
	One of the firms is Delphi, which makes injector systems for diesel engines. It imports parts, assembles them and then exports them. They go from Europe to Britain and then back to Europe. It is that kind of relationship that is important and necessary in a world of increasingly complex supply chains and relationships between businesses. It is really important to recognise that that is the bread and butter of what the single market is all about. I heard earlier the worries about the single market and the need to think of it as unimportant, but I completely disagree. Not only is it very important, but it is our responsibility as supporters of the coalition Government to ensure that we press ahead with its expansion, deepening and enhancement.
	The euro itself is also an important issue for us. We have to recognise that we are neighbours of 17 EU member states that are in the euro. An unmanaged collapse, or indeed any collapse, would be absolutely catastrophic. It is in our interests as a country to make sure that the euro thrives. We may not like the euro or want to join it, but it is in our interest to ensure that it does not break up. That is at the core of some of the issues raised today; I shall come to them in a minute.
	Something else has cropped up in this debate—the good old referendum. I see why people want referendums and why they think that this Chamber should not make all the decisions, but also cast them out to the people. However, the people ask us to make decisions; that is what Parliament is for. I buy the argument that too many referendums are more likely than anything to reduce our influence, as decision makers and members of Governments, in this Chamber. We must be really careful about when we think we should have referendums and when we do not.
	There is really no need at all for a referendum on what we are discussing tonight. The last Europe Act that we passed suggested that we should have referendums
	on the passage of power to the European Union, but which power will we pass to the European Union through this legislation? We will not pass any; actually, we are grabbing some power back.

Jacob Rees-Mogg: We are obviously giving the European Union the power to set up a fund. That must be a power, even if it is not worthy of a referendum.

Neil Carmichael: I am grateful for that intervention, which goes to the heart of the question. If we are worrying about powers that concern us, the answer to my question is still no. That is the point: the answer is still no, because no powers are being transferred through this legislation from us to the European Union. If anyone can describe a power that is being transferred, I want to know about it, but unless they can the answer is that no powers are being transferred. That point is really important.
	I shall go further. The real issue about the legislation is that it effectively removes qualified majority voting from the issues of what we were deciding before. That is why we need not worry; we are saying that there is now a power of veto on the process—so, ironically, there is a further strengthening of the British approach to dealing with the European Union. I question the need for regular referendums because that would reduce the influence of the House and I certainly say that there is no need for a referendum on this item, because at the end of the day there is no evidence of any transfer of power.
	That is not the end of the matter. The issue that has been bubbling around this debate is that we do not like the euro so we have to pull out or do something to undermine it. My point is that we are not going to join the euro, but we want to make sure that our interests as a country are properly protected so that we can continue trading with the countries that are in the euro.
	Let us face it—those countries are significant traders. As a whole, the European Union still effectively controls a quarter of the world’s gross domestic product. Seventeen members of the eurozone are part of that and they are the bigger part of the EU. In sheer figures, we are talking about a large portion of the world’s gross domestic product. That suggests that we have to be sensible about how the euro is treated. Sensible American policy makers agree; they want Britain to be part of the European Union, exercising appropriate influence in a way that promotes the trade activities that we see in Europe and beyond. That is not true of all Americans; one or two in Tampa during the Republican convention would raise eyebrows. However, American government, in the broadest sense, recognises that having Britain in the European Union is a good thing because it has a good influence on how the EU shapes up. It is important for us to recognise that as politicians, policy makers and administrators.
	Poland was mentioned earlier, and I understand why. It is a very interesting country to think about because it is the only one that has not had a problem with growth ever since this crisis started. That is partly because it has always had a relatively sensible approach to borrowing money and deficit management. It has also recognised its close proximity to Germany, which is of course part
	of the eurozone. It is not surprising that the Polish Government are now wondering exactly what they are going to do about signalling their intentions on joining the euro—a decision that Donald Tusk needs to start to formulate as the months and years go by. Poland is not necessarily going to reject the option of joining the euro, and that is in complete contrast to the usual story about countries leaving the euro. We need to bear that in mind as we deliberate on the future of the euro as a whole.
	We do not want to join the euro ourselves; we think that would be a mistake. We are not planning to make any decision that would lead us towards having to do so, but the British Government and the British industrial state need to think very carefully about how the euro situation unfolds. Our relationships with the big players are therefore very important.

Martin Horwood: I congratulate the hon. Gentleman on his speech, not least on his points about the importance of European trade to business in Gloucestershire, where both he and I obviously have an interest. He is doing a good job of flying a more positive and realistic flag for the Conservatives’ approach to Europe, and I congratulate him on that as well. Would he go as far as me in saying that until the eurozone returns to economic health it will become increasingly difficult for this country to return to full economic health, and that therefore any small thing that we can do to enable that to happen must be a positive? I am not suggesting that this Bill guarantees that that will happen, but it is perhaps one small step in helping to enable European, particularly eurozone, countries to rebuild their economies.

Neil Carmichael: I thank the hon. Gentleman for his intervention; I am very grateful for the level of support. Plenty of Conservatives share my views; he should not think that we are some sort of sect. He is absolutely right to point out that Britain’s best interests are connected with helping the overall economy in Europe, which obviously includes the eurozone.
	Several hon. Members have referred to the situation in Germany, which is pivotal. One has to ask what Angela Merkel is really thinking and why she takes the attitude that she does about how the bail-out operations are decided and managed. That goes to heart of something else that has cropped up in this debate—devaluing currencies. The Germans like a robust currency because they believe that it is good for their economy. They have had one for an awfully long time, and in broad terms their economy has benefited from it. They know that the relative strength of the deutschmark before, and the euro now, has been a good thing for economic policy management. They also know that if they dish out bail-outs too prematurely they will not extract the necessary promises from the other nation states to put right the issues that are not so good in those countries.
	At the end of the day, it is important that bail-outs lead to a result, namely improved productivity, better debt management and better management of public expenditure. That is what needs to happen in nation states that are in difficulty, which is why the issue of eurobonds is so interesting and is taking such a long time to crystallise into real results. Those countries that understand the need for robust currencies and, effectively, inflation-proof strategies will win a long-term gain,
	which proves that that is the right way to improve productivity and ensure that economies grow according to robust economic indicators.
	It is necessary for the British Government to continue to work with the German Government in that regard, so that it remains possible for us to develop the right kind of relationship with the rest of the eurozone. We have to ensure, first, that we influence the single market to expand into services and energy; secondly, that we get proper discipline over public finances; and thirdly, that we recognise the value of strong currencies.
	It is not true that devaluing willy-nilly achieves results—we have seen that so often in our own history and in that of other countries. Remember 1967, when devaluation was argued over ruthlessly by Harold Wilson, Jim Callaghan and others, but what did it actually produce? It did not produce additional productivity or the kind of growth that was anticipated and so desperately needed. Devaluation is not a panacea in complex economic situations in which a lot of trading takes place between complex economies. That is an important marker for our own economic prospects.
	In conclusion, I firmly believe that this country needs to deal with its deficit and I recognise the importance of reforming the real economy. I apply the same logic to both of those things in the European Union. Britain should be a positive influence. It should not necessarily be involved in the euro, but it should be able and willing to ensure that the world’s largest single area of economic activity remains a credible force for the future.

Jacob Rees-Mogg: What a pleasure it is, after aestivating for six weeks, to have returned to this House to discuss, of all things, the European Union. It puts a veritable spring in one’s step, even as we advance into autumn. It is a real pleasure to be able to support the Government on this occasion—a rare treat, one might say, when it comes to matters European. I will probably even find myself in the same Division Lobby as my hon. Friend the Member for Cheltenham (Martin Horwood).
	The Government deserve praise to come on them from all sides for, first, the European Union Act 2011, which has led to today’s debate on this Bill. Without it, there would have been a two-hour debate in the House of Commons or the House of Lords and, bingo, a European treaty would have been changed. We would not have been arguing the finer points, as I have done with my hon. Friend the Member for Rochester and Strood (Mark Reckless), about whether the matter deserves a referendum. It would have gone through on a quiet Wednesday evening, on a deferred Division, with nobody here and nobody thinking or concerned about it. Thanks to Her Majesty’s Government, that has been put right. We have a proper process and a full-scale Bill, and I believe we will have the Committee stage on the Floor of the House as it is a constitutional Bill. It is all being done in a way that makes a parliamentarian’s heart glow with pride, if hearts glow with pride. It is a great achievement of the Government to have got us here.
	The Government deserve a good deal of credit for what they have succeeded in negotiating. I want to be reasonably generous, but not excessively so. They have got us out of article 122, on the European financial stabilisation mechanism, which required us to put money
	into a European pot to bail out, so far, Portugal and Ireland. One may say that bailing out Portugal and Ireland is not too bad a thing to have done. Portugal is our oldest ally, and I am sure your mind often turns to the treaty of Windsor in 1386, Mr Deputy Speaker, which is why we have a fellow feeling with the Portuguese. Ireland is our close neighbour and friend and is important to us. It is worth noting that that €48 billion liability still remains, and the Foreign Secretary was careful to say that the Bill would exclude us from new liabilities. The old ones are still there, so we are signed up to our share of €48 billion of liabilities, which may come back to haunt us. However, we are exempted from further liabilities.
	The European treaties say that there should be no bail-out from us, although my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) complained that often European treaties say one thing and the European councils do another, which is perfectly true. It is a regular state of affairs that the construct of the European Union is basically dishonest. A point that I shall make at every opportunity is that we know that the judges of the European Court of Justice are so corrupt that they judged in their own favour to give themselves a pay increase. We therefore know that the institutions of Europe are rotten, failed and corrupt. None the less, we are living with them, and they have decided that they will have a bail-out mechanism. It is better that we should be out of it. We should say to them, “This is your euro project. You go ahead, you pay for it. Thank you very much.” It should be outside our bailiwick, to the eurozone members’ charge, not the British and the other non-eurozone countries.
	The Government have achieved something in ensuring that, although I have questions about what the black letter of the law actually says. We know full well that recitals are not the law, and that article 122 remains. We know that the regulation allowing €60 billion to be spent on propping up the euro remains intact, and it is conceivable, if unlikely, that that part of the European treaty could be used in future, because it is a qualified majority matter rather than a unanimity one. That has not been excluded from the treaty, but there is a strong political promise that it will not be used. Although I have my doubts about strong EU political promises—in the past they have not necessarily been adhered to—it is still an achievement to have got the bulk of the future cost away from Her Majesty’s Government and the British people. The Government deserve to be commended for that.
	We have talked much in this debate about what the best solution for the eurozone is, and about whether we, as a country looking on, should help it prop up the euro or obstruct it in its desire to do so. That raises a fascinating moral question about the duty that one owes to one’s neighbour who is determined to follow a course of folly and error. If someone sees a man who is about to run under a bus, it is their moral duty to make some effort to grab him back. They may even risk their own safety in attempting that endeavour. It is an important requirement of neighbourliness and a duty of humanity. The question is, are the members of the eurozone throwing themselves under a bus, or are they committing some lesser folly which means that, because we know our intervention could not succeed, our duty to intervene and stop them does not exist? I think that the second category is the answer. If the Europeans had any sense, they would have an orderly dissolution of the euro.
	Consider what the euro is doing to Greece, Portugal, Ireland, Spain and Italy: impoverishing their people, putting them out of jobs, making them unable to afford some of the basic needs of life. That is done for a political project driven by bureaucrats with no democratic accountability. They fire Governments that they do not like and they have put their despots into Greece and Italy. The panjandrums of Brussels are sent in to rule, overturning democracy as we have historically known it. They have done all that to prop up the euro, which strangles economic growth.
	Although one does not want a constant series of devaluations and a Zimbabwean-style economic policy, we have found in the past that devaluation can be the answer to otherwise incessant deflation. We found that ourselves, not just in 1992, when we left the exchange rate mechanism but also—perhaps the more appropriate comparison—in 1931, when we came off the gold standard.
	When we look back at countries leaving the gold standard in the 1930s, we see that the later the country left, the worse its economic performance. The greater the deflation, the longer countries pressed down on their peoples with falsely inflated currency values. Europe is doing exactly the same again. It learnt the wrong lesson from Weimar Germany. It was not the inflation, but the deflation that led to Hitler. The fear of inflation is so great that Europe would rather crush the people of Greece under a deflation than risk the printing of currency, which the Greeks could do for themselves if they reintroduced the drachma.
	That is the crisis that we are allowing our European neighbours to take upon themselves, and the Government are doing nothing about it, but letting them—if the analogy is right—throw themselves under the bus.
	I have some sympathy with the Government, and I am sorry that the Foreign Secretary is not here because he would approve of the quotation that I shall use from one of his most distinguished predecessors, George Canning, who said:
	“But of all plagues, good Heaven, thy wrath can send,
	Save me, oh, save me, from the candid friend.”
	If Her Majesty’s Government were to take up the role of candid friend—it is fine for Back Benchers to do it, and “friend” may not be quite the right word for the European Union—what would happen? What response would we find from the courts of Europe? They would say, “The British never liked the euro in the first place. You set out with your bankers, whom we’re now going to regulate, to undermine it, and it is your fault that the euro is collapsing.” Not the fault of those who have spent too much in Greece and those who have worked too little in some other European countries, arguably including Greece, but that of the Anglo Saxons and their evil bankers. I therefore understand why the Government are not being as robust as those of us who do not bear the responsibilities of office find it very easy to be in such debates.
	Here we are, back after the summer. The cricket season comes to an end—

Nigel Adams: Shame!

Jacob Rees-Mogg: I agree with my hon. Friend—it is a great shame. The cricket season comes to an end but the euro crisis continues. It has gone on holiday for the
	summer, like most of the Eurocrats, and we find that Britain is allowing them to carry on with it because she has no choice. We are therefore right to let them go in that direction and not to obstruct them. Of course, we should use any future treaties to bring powers back to the United Kingdom, but on this occasion, we got something back. Honour was satisfied by what we got back, and, most importantly, Parliament and, therefore, the British people are being properly served by the proposal coming to us as a Bill rather than being pushed through as a mere piece of minutiae, in the same way as we may decide whether to charge for tours of Big Ben.

Emma Reynolds: It is a great pleasure to be back from holiday, although I do not lament the end of the cricket season in quite the same way as the hon. Member for North East Somerset (Jacob Rees-Mogg). We have had a wide-ranging debate, some of which concerned the short Bill before us. It is an enabling piece of legislation that will amend article 136 of the treaty on the functioning of the European Union, and allow member states to set up a permanent bail-out fund—the European stability mechanism.
	We have heard speeches from many right hon. and hon. Members. My right hon. Friend the Member for Rotherham (Mr MacShane) reminded us of the great dangers of what he called a “Grexodus”—an exit by Greece from the eurozone—and of the fact that the vast majority of Greeks want to stay within the eurozone. My hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) warned of the great dangers of a wider euro collapse, and we heard also from my hon. Friend the Member for Luton North (Kelvin Hopkins), who takes a somewhat different position, as was reflected in his original opposition to the euro.
	From the Government Benches we heard a characteristically detailed and lengthy critique of both the euro and the EU by the hon. Member for Stone (Mr Cash), and the hon. Member for Camborne and Redruth (George Eustice) reminded us that the UK is not bound by the ESM. We heard an uncharacteristic speech—it was almost gushing and positive—about the Government from the hon. Member for North East Somerset, and a somewhat more critical speech from the hon. Member for Rochester and Strood (Mark Reckless). The hon. Member for Stroud (Neil Carmichael) reminded us that it is in the national interest that the euro survives and does not collapse.
	As the shadow Foreign Secretary, my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander) set out at the start of the debate that the Opposition are in favour of the Bill and the European stability mechanism not because the ESM is a silver bullet to solve all the eurozone’s problems, but because it is part of the solution. We are, however, concerned about the delay in its introduction, and about the insufficient scale of the firewall. Since the start of the crisis, political inaction has produced uncertainty in the markets, which in turn has deepened the eurozone crisis. Markets need to know that European leaders have the political will to tackle the crisis. Therefore, alongside the establishment of the ESM, further measures are urgently needed to restore stability to the eurozone, and to provide a greater
	role for the European Central Bank, a recapitalisation of European banks, and a greater emphasis on growth rather than austerity alone.
	The British Government and other European Governments have imposed collective austerity. That has provoked a simultaneous shrinkage of our economies and produced a downward spiral with a devastating recession in Greece and an unemployment crisis afflicting many European countries.
	The International Monetary Fund and several ratings agencies have been clear in their criticism of austerity-alone economics. Last April, the IMF stated:
	“Austerity alone cannot treat the economic malaise in the major advanced economies.”,
	and Standard and Poor’s has stated that
	“austerity alone risks becoming self-defeating.”
	Thankfully, a number of changes of Government in the rest of the EU have led to a recent shift away from severe austerity towards a focus on growth, and we welcome the growth package agreed by European leaders in June. The UK Government, however, have little authority in promoting growth in Europe, given that they have produced a double-dip recession at home.
	Growth and stability in the eurozone are manifestly in the UK’s national interest—40% of our exports go to the 17 members of the eurozone, and the wider EU is our biggest trading partner. The Government like to lay the blame for their economic mistakes at the doors of others, and Ministers have blamed everybody but themselves—the banks, the royal wedding, bank holidays, the rain and, of course, the snow. The eurozone is the latest smokescreen for the Government’s economic mistakes, but the uncomfortable truth is that, had it not been for our exports, our economy would have gone back into recession a year ago.
	Several hon. Members have called for the break-up of the eurozone, but that is neither in the British national interest, nor an easy, cost-free way out of the crisis, just as “I told you so” is not an economic policy. Several hon. Members have suggested that Greece leave the eurozone. However, the consequences would be disastrous both for the Greek people and the rest of the EU. A new Greek currency would be likely to plummet in value. Imports, on which Greece relies heavily for both food and medical supplies, would become prohibitively expensive and, without a huge injection of capital, the Greek banking sector could collapse, wiping out ordinary people’s savings. Further severe spending cuts would be needed to enable the Greek Government to finance its deficit and pay public sector salaries and pensions.
	More widely, the contagion effect of a Greek exit could be disastrous for Europe. The eurozone’s largest banks, not to mention the European Central Bank, have huge exposure to Greek debt, and British banks would also be affected. Moreover, by setting a precedent for eurozone exit, a Greek exit would seriously damage depositor confidence. At best, this would introduce greater uncertainty to the eurozone, and at worst, it would precipitate a run on Europe’s biggest banks. Finally, a credit event, which might follow a Greek exit, would cause turmoil on financial markets. Far from stabilising the eurozone, a Greek exit might serve only to deepen the crisis, and there is no possibility that Britain would be completely insulated from that.
	As ever, today’s debate has highlighted yet again the deep divisions in the Conservative party over Europe. Clearly, the wounds of the last 20 years have not healed. We have the usual suspects making speeches that sound oddly reminiscent and the party leadership is having trouble managing some of its Back Benchers. I might not agree all of the time with the hon. Member for Stone, but at least he is consistent. The same cannot be said for the Government, who try to placate their Back Benchers while at the same time trying to rebuild bridges with our European partners.
	I welcome the Europe Minister’s new found linguistic skills which he has used to pen articles in several European newspapers—Le Monde, entre autres—in which he extols the virtues of the UK’s membership of the EU and reassures the reader that the Government are wholly committed to the UK remaining in the EU. Perhaps he could clarify when he is going to write a similar article for the British press.
	I am happy to leave the Tories squabbling amongst themselves: we are clear that enabling the setting up of the ESM is in the UK’s national interest, as is a return to growth and stability both in the UK and the rest of the EU. For that reason, we support the Bill.

David Lidington: I start by thanking all right hon. and hon. Members who have taken part in the debate. To the hon. Member for Wolverhampton North East (Emma Reynolds) I say that I will be happy to send her a copy of an article that I published in The Sun on Sunday earlier this year, which set out in good, plain English the case that I have consistently made for a constructive, critical and engaged approach by the United Kingdom in the European Union.
	As several hon. Members have said—especially my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg)—it is important to note that we are debating this initiative to change the European Union treaties in the context of a debate on primary legislation. In an earlier intervention, my hon. Friend the Member for Rochester and Strood (Mark Reckless) questioned whether the European Union Act 2011 had made any difference. He was correct to state that in the case of treaty changes that were agreed before 2008, treaty amendments could be approved here only through primary legislation, but in 2008 the law was changed. At the same time as the Lisbon treaty was being taken through by the then Government, they provided in section 6(1)(a) of the European Union (Amendment) Act 2008 that all that would be needed henceforward to approve the use of the simplified revision procedure would be for each House of Parliament to approve a Government motion without amendment.
	As my hon. Friend the Member for North East Somerset pointed out with characteristic acuity, there is a considerable difference between the kind of detailed examination and debate that takes place on the Floor of the House during the various stages of proceedings on primary legislation and the brief 90-minute or two-hour debate on a motion tabled under the provisions of the 2008 legislation. I would hope that my right hon. and hon. Friends, whatever our differences on one or two other matters to do with the EU, would acknowledge
	that the 2011 Act has made an important and significant difference in restoring the central role of Parliament and, in particular, the Chamber of the House of Commons, as the place where things as important and significant as European treaty amendments can be considered in full. The disgrace is that the 2008 legislation sought to take those powers away from Parliament in the first place.
	Before moving to the content of the Bill, I want briefly to respond to some of the points made by hon. Members during the debate. I turn first, of course, to my hon. Friend the Member for Stone (Mr Cash). The hon. Member for Wolverhampton North East said that she had returned from the summer break feeling invigorated and ready for the European fray once again. I have descended from the mountains of Snowdonia full of enthusiasm and relish to debate with my hon. Friend once again. I agreed with a fair measure of his analysis, and I think that most of those who contributed to this debate, from whatever party, agreed that the euro was created without sufficient thought being given to ensuring the stability of the single currency area, given that there was not the degree of fiscal, economic and political integration normally expected in a currency area.
	My hon. Friend the Member for Stone warned in stark terms that the current eurozone crisis contained not only profound economic risks but significant—he would probably say dangerous—political challenges, and he has been consistent in arguing those points. I am one of those survivors on the Government Benches who has vivid memories of his contributions at 5 o’clock in the morning during proceedings on the Maastricht legislation in 1992-93. I agree that the crisis facing the euro presents the eurozone countries with important political as well as economic challenges. If it is agreed to centralise or co-ordinate decisions on some of the fundamentals of economic policy, it also has to be decided how those decisions, which are so important to the citizens of the countries concerned, are to be made democratically accountable. There is, then, a political, as well as an economic challenge, for our friends and neighbours in the eurozone.
	It would be foolish, however, for British politicians to assume that the leaders and voters in other EU member states will necessarily respond to those political challenges in the same way as the UK electorate might be expected to do. Each European country has its own historical experience and economic and geographical particularities to take into account.
	Let me take, for example, the conversations I had with members of the Governments of the three Baltic republics during my visits there. One of the things that they were keen to make clear to me was that although they certainly valued and cherished their hard won independence—the reclamation of their freedom—they also saw the integration of the European Union not as a threat, but as a way to entrench their European and democratic identity, so that never again could they be pulled back towards an eastern alignment or towards Russian influence, which they still feared, for understandable historical reasons.
	Let us take Germany, which is a very different case. Where I parted company with my hon. Friend the Member for Stone was when he spoke of Germany. I do
	not think it was his intention, but some of the phrases he used came across in such a way as to present Germany as somehow having sinister intentions towards the rest of Europe. However, whenever one speaks to German politicians, from whichever political party they come, what one finds striking is that they see support for European integration as a means of providing reassurance to their neighbours that Germany is not going to go off on some nationalist course again; that France, the Netherlands and other countries that were occupied by Germany in the mid-20th century would see Germany’s commitment to European institutions and European methods of governance as a reassurance to them, not a threat.

William Cash: If I may make just a short observation about my right hon. Friend’s remarks, it is, fundamentally, that in my judgment Germany is very concerned about government by rule, whereas we in the United Kingdom are much more concerned about government by consent. The fundamental problem is one of democracy, as illustrated by the fact that about 99% of the Bundestag agreed to all the arrangements, yet we know from opinion polls what percentage of the German people take a different view. It is that dichotomy which causes concern, and there are other factors in relation to Angela Merkel’s agenda.

David Lidington: I do not want to get drawn into a detailed debate about a comparative political analysis between the British and German approaches. Let me say briefly to my hon. Friend, first, that when Germany looks at her history, she has good reasons for looking to firm rules and strong institutions, such as the constitutional court. Secondly, it is not completely unknown for the House of Commons to vote by a large majority in favour of something that every opinion poll tells it the majority of the British public opposes, so I do not think we should get too hung up on there being some vast difference in democratic interpretation between the two nations.

Julian Lewis: Can my right hon. Friend explain to me and the House what exactly senior Ministers mean when they talk about the remorseless logic of fiscal integration? Do they mean that it will lead inevitably to political integration, and if they do, is it no longer the case that we regard the emergence of a single power on the continent of Europe as fundamentally not in the UK’s national interest?

David Lidington: What it means is that we accept that, as Conservative politicians have argued since the euro was created, for a single currency zone to operate successfully over a number of different national economies there would need to be a measure of fiscal and economic integration, so that those economic differences can be managed successfully and in a stable fashion in that currency union. It is for the countries of the eurozone to work out exactly which economic and political measures will be right for their particular circumstances.

George Eustice: The Minister makes an important point about the remorseless logic. Does he not agree that one of the big problems with the way in which the European Union has developed is that it tends to introduce half-baked ideas, knowing full well that it will have to
	come back, several years down the line, with further measures that will mean further integration? Does he agree that we need to break that logic in some way and do what people really want, rather than creating a crisis that fuels more integration, which nobody wants?

David Lidington: Ultimately, it has to be for the electorate in each country to decide on the extent to which they want to take part in integration. My experience over the past two years of talking to Government leaders and other politicians in the other 26 countries, as well as following—as far as one can—the movement of opinion among the public in those countries, tells me that there is a greater level of support or toleration for Europe’s political and economic integration than there tends to be in the UK. I am generalising, of course, and there are significant differences among the 26 countries, but the historical experience of the United Kingdom in the 20th century differs from that of much of continental Europe, which helps to explain the difference in political attitudes towards European integration.
	Various hon. Friends have raised a number of points during the debate, to which I wish to respond. My hon. Friends the Members for Stone and for Rochester and Strood both asked why the measure that we are debating today should be exempt from the requirement in the European Union Act 2011 for a referendum. The Act requires a referendum to be held when European Union treaties are changed in such a way as to create a transfer of competence or power from the United Kingdom to the European Union. The plain fact is that, as my hon. Friends the Members for Stroud (Neil Carmichael) and for North East Somerset pointed out, this measure does not transfer any such power or competence from this country to the institutions of the European Union. It does not even apply to the United Kingdom.
	The amendment that we are debating is an amendment to article 136 of the treaty on the functioning of the European Union, which is the first article under chapter 4 of that treaty. That chapter is entitled “Provisions specific to Member States whose currency is the euro”. So, in that important legal treaty sense, this measure does not apply to the United Kingdom, although our ratification is needed to bring it into effect. Because it does not apply to us and does not transfer power or competence, there is no requirement for a referendum.

William Cash: rose —

Mark Reckless: rose —

David Lidington: My two hon. Friends have made other related comments, to which I would like to reply first. If they then wish to intervene on me, I will give way.
	My hon. Friend the Member for Stone and the right hon. Member for Rotherham (Mr MacShane) said that the referendum pledge in the 2011 Act was meaningless because my right hon. Friend the Foreign Secretary could, in effect, decide on a whim whether a referendum was needed or not. They made reference to the requirement in the Act for the Secretary of State to make and publish a decision on whether a referendum was required. Those fears are wide of the mark, however. The Secretary of State is not permitted to act on a whim; he has to act in accordance with the law, and it is the 2011 Act that sets out in some detail precisely when a referendum is
	required. In making the statement to Parliament, the Secretary of State must say whether the referendum is or is not required under the terms of the Act.
	My hon. Friend the Member for Rochester and Strood, in asking why no referendum was required in this case, pointed to what he saw as a contradiction in the Government’s approach. I need to divide my response to him into two parts. Paragraph 3 of the recitals or preamble to the decision of 25 March 2011 formally recalls the previous decision by the European Council that article 122(2) would no longer be needed and “should not be used”. The text of the decision comes after paragraph 6 of the recitals and is introduced by the words “has adopted this decision:”. The text of the amendment to the treaties is what is being ratified by this Bill. So the 2011 Act bites on the amendment to the treaties, which is the narrow addition to article 136 of the treaty on the functioning of the European Union. This measure would attract a referendum if it included one or more of the elements listed in sections 4(1) to 4(3) of the 2011 Act. Those subsections, which provide quite a long list, define what we mean by a transfer of competence or powers. This treaty amendment does not include any of those elements that require a referendum, so we do not require a referendum in this case.

William Cash: I appreciate that my right hon. Friend is in a labyrinth and that it will take more than the minotaur to get him out of it. The problem is that, as the Bill’s explanatory notes clearly state, the exemption condition, which is what we are talking about,
	“is met if the Act”—
	the Bill, as enacted—
	“providing for the approval of the decision states that the decision does not fall within section 4 of the Act.”
	The bottom line is that the Government’s ultimate defence that they have got the process right is that under the Act the very decision that is taken is endorsed by Parliament when it passes the Bill; it is not about whether or not the provisions have been complied with. Clause 1(3) states that the
	“decision does not fall within section 4 of the European Union Act 2011”.
	In other words, we are being told, “Do not argue with me Back Benchers, because in this Act, when it goes through, that is final.” That is the bottom line of this provision.

David Lidington: That part of the Bill is included because it is a requirement of the 2011 Act that we bring this to Parliament to ask it to ratify formally the Government’s judgment as to whether or not a referendum is required. However, that judgment by the Government—that opinion embodied in the statement by my right hon. Friend the Foreign Secretary—followed a very careful analysis of the treaty amendment in the light of the provisions of the 2011 Act. Obviously I regret bitterly that I have clearly been unsuccessful in playing the role of Ariadne to guide my hon. Friend out of a labyrinth, but I somewhat suspect that he is not that keen to extract himself from it. The one thing he has not challenged me on is whether the treaty amendment contains any of the transfers of power or competence to the European Union from the United Kingdom specified in sections 4(1)
	to 4(3) of the 2011 Act. I am sure that we will have the delightful opportunity of pursuing those points further in Committee.

Mark Reckless: Will the Minister give way?

David Lidington: I will give way once more, but I do not want to pre-empt our discussions in Committee.

Mark Reckless: My concern is that in the statement provided to the House under section 5, the ministerial team has relied on section 4(4)(b), which states that a referendum will not happen when a treaty or article 48(6) decision applies only to member states other than the United Kingdom. The whole debate has relied on recitals from within that article 48(6) decision, saying that the provision gets us out of article 122 and that we will not have to contribute to further bail-outs. Surely the Government cannot have it both ways.

David Lidington: My hon. Friend is eliding two things. We have before us and are seeking to ratify through this Bill a treaty amendment. It relates to article 136, which applies only to those countries whose currency is the euro. Therefore, by definition, unless the United Kingdom were to join the euro, which would in itself require a referendum under the 2011 Act, it cannot apply to us. Alongside that treaty amendment, my right hon. Friend the Prime Minister successfully, and after a lot of hard work, negotiated agreement from all Heads of State and Government in the European Union that when the ESM comes into force, any future liabilities of the United Kingdom to bail out eurozone countries under the EFSM will be extinguished. That is a very significant gain for the British national interest and I hope that on reflection my hon. Friend the Member for Rochester and Strood will recognise it as such.
	As I have said, in return for agreeing this treaty amendment, the Prime Minister secured agreement at the European Council that once the ESM is set up, article 122(2) of the treaty on the functioning of the European Union should no longer be used to safeguard the stability of the euro area as a whole. Our liability for future euro area financial assistance programmes under the EU budget will be removed and that is directly in the UK’s national interest. As my hon. Friend the Member for Camborne and Redruth (George Eustice) said, this gain for our interests should be considered as proportionate to the scope of the treaty change that we are considering, which is narrow and specific in what it seeks to achieve. We should also not ignore the fact that the ESM will provide the euro area with a permanent financial assistance mechanism to assist euro area member states in financial difficulty. We all share the enormous concern over the ongoing crisis in the eurozone and the chilling effect that it is having on our economy.
	A stable eurozone is in the interests of the United Kingdom. We rely on those 17 countries for more than 40% of our trade, but that is only part of the picture. Confidence and stability in the eurozone are in our national interests and the resolution of the debt crisis in the eurozone would be the biggest single boost to business confidence that could happen in the British economy. That is precisely why the eurozone countries say that
	they need the ESM and why it is important to ensure, through all 27 member states ratifying the treaty amendment, that there is no room for doubt about that amendment’s and therefore the ESM’s compatibility with the European Union treaties.
	We are not in the euro and the United Kingdom will not take part in the ESM, but it would harm our interests to stand in the way of the eurozone’s efforts to set it up and help sort out this crisis, a point made very strongly by my hon. Friend the Member for Stroud. No one is under any illusion that the European stability mechanism will be some silver bullet that will solve the eurozone’s problems overnight, but it is a step in the right direction.
	When the right hon. Member for Paisley and Renfrewshire South (Mr Alexander), the shadow Foreign Secretary, spoke, he treated us to a lecture about the alleged failures of the Government’s economic policy. No Minister would stand at the Dispatch Box and say anything other than that the United Kingdom’s economic problems are deep seated and that they have been aggravated by the crisis in the eurozone, but what surprised me—perhaps I am insufficiently cynical—was the fact that there was not one word of regret from the right hon. Gentleman, let alone a morsel of contrition, for the contribution made by his Government to the economic woes from which the United Kingdom now suffers.
	Some European comparisons are really quite interesting in this context. A number of hon. Members commented on the fact that some European Union countries have been more successful in recent years than the United Kingdom or the majority of EU member states have been, but it is telling to consider the contrast. Germany was paying down its debts when the Labour party was piling up the deficit here and maxing out the United Kingdom’s credit card. In the 10 years from 1997, Germany had annual growth in industrial production of 3% or more a year, while average growth in the United Kingdom over that period struggled to get above 0.2% annually. In the first decade of the 21st century, Germany maintained its share of world exports while the United Kingdom’s share almost halved thanks to the disastrous economic stewardship of the right hon. Gentleman and the Labour party.
	The European Union, including the United Kingdom, needs a relentless focus on competitiveness and growth through deepening the European single market; building a single market in the digital economy, energy and services; cutting the costs of European regulation on businesses, especially small enterprises; and agreeing more free trade deals with Canada, Singapore, Japan, the United States of America and other regions of the world.
	The legislation before us is one step forward, but it is only part of the strategy for renewing economic growth and competitiveness in the United Kingdom and in Europe as a whole. The Government will continue to pursue that strategy with vigour, energy and determination.
	Question put and agreed  to .
	Bill accordingly read a Second  time .

European Union (Approval of Treaty Amendment Decision) Bill [Lords] (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),
	That the following provisions shall apply to the European Union (Approval of Treaty Amendment Decision) Bill [Lords]:
	Committal
	1. The Bill shall be committed to a Committee of the whole House.
	Proceedings in Committee, on Consideration and Third Reading
	2. Proceedings in Committee, any proceedings on Consideration and proceedings on Third Reading shall be taken in two days in accordance with the following provisions of this Order.
	3. Proceedings in Committee and any proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the second day.
	4. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
	Programming committee
	5. Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on consideration or to proceedings on Third Reading.
	Other proceedings
	6. Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(James Duddridge.)
	Question  agreed  to .

PEOPLE WITH LEARNING DISABILITIES (ABUSE)

Motion made, and Question proposed, That this House do now adjourn.—(James  Duddridge .)

Tom Clarke: Thank you, Mr Speaker, for facilitating what I believe is a very important debate. We recently welcomed and entertained the entire world to the Olympic and Paralympic games. By every measureable standard, both events have been hugely successful for Great Britain, so I have asked myself incessantly, how can a nation reach such towering heights of achievement but retain the capacity to engage in crass behaviour that should make us all feel ashamed? The standard of care and protection that we provide to people with learning disabilities is a shameful indictment of our society. There is no defence for the way we ill-treat people with learning disabilities.
	Mencap felt compelled to produce a report on the subject, called “Out of sight”. I recommend that everyone with an interest in disability or human rights takes the time to read that report, which was co-authored by the Challenging Behaviour Foundation. It calls for an end to the neglect and abuse of people with a learning disability. The opening remarks are defiant: “Enough is enough.” I echo that, and would add: “No more and never again.”
	It is nothing short of a national scandal that we have allowed people with learning disabilities to be so marginalised and ill-treated. It should not have happened, and it had better not still be happening. What can we do to avoid it happening again? We need to find the necessary legislative measures that will root out the outrageous behaviour that has been brutally meted out to defenceless, vulnerable people. The abuse is not confined to care homes.
	In preparation for this debate, I reflected on the fact that before the summer recess, Lord Rix and I, as co-chairs of the all-party learning disability group, launched the start of learning disability week by hosting a special event in Parliament. We sought to highlight the appalling spectacle of how people with a disability are subjected to hate crime in today’s Britain. Our aim was to raise awareness of the offence, and demand positive progress from police forces across the UK in tackling such crime. Research has shown that in today’s Britain, as many as nine out of 10 people with a learning disability have been victims of hate crime, or subject to bullying. People with a learning disability tend to take longer to learn, and may need support to develop new skills, understand complex information and interact with other people.
	Even as we campaigned, more evidence emerged. Winterbourne View hospital was a care unit that provided short-term monitoring of adults with learning disabilities. The BBC’s “Panorama” programme exposed a pattern of institutional abuse perpetrated by several nurses against the most vulnerable patients in the unit.

Jack Lopresti: Recently, the Winterbourne View serious case review was published; it strongly criticised South Gloucestershire council for failing to prevent the abuse given that, in the years leading up to the terrible scenes that we witnessed on “Panorama”, 40 alerts were sent to the council but were
	not acted on. It is a tragedy and a travesty that they were not acted on sooner; if they had been, we may have been able to prevent a great many of the abuses and atrocities that we saw on the programme. Does the right hon. Gentleman agree that it is imperative that local councils act immediately on information and on issues that are flagged up, as they were in the Winterbourne View case, to ensure that we never see such terrible scenes again?

Tom Clarke: I am pleased that the Member in whose constituency Winterbourne View was—I know he has worked very hard on the issue—has intervened, and I am sure that the House will take careful note of what he has said.
	Among the abuses that “Panorama” thought important were the following: patients were forced to have showers while fully clothed; mouthwash was poured into a patient’s eyes; a patient had a bucket of cold water poured over her and was forced to sit outside in the cold; patients were dragged along the floor; a patient was repeatedly punched; and a patient was driven to attempt suicide, and was subsequently mocked. That establishes that vulnerable people were tortured for the amusement of men and women guilty of an inhuman and monstrous series of crimes.

Fiona Mactaggart: The thing that struck me about the Winterbourne View case is that the individual incidents of torture meted out to the people who were being assessed there—my right hon. Friend is right to describe it as torture—was the same torture as was meted out to residents in a care home on the border of my constituency which, like Winterbourne View, had many residents whose families were miles and miles away. Is my right hon. Friend, like me, shocked to learn that the Department of Health has no central register of out-of-area placements of people with learning disabilities? Will he, in the course of his remarks, ask the Minister if he will ensure that we have national figures about where people are sent, miles away from their families who want to protect them, into institutions such as Winterbourne View?

Tom Clarke: I am grateful to my hon. Friend. On these matters she shows a great humanitarian understanding, and the very point that she raises was raised with me today by families who came down to London from all over the UK because of this debate. My hon. Friend should know that she has considerable support.
	The harrowing examples that are given, and there are many more, of depraved activity that some will inflict on the most vulnerable among us are almost impossible to comprehend. My hon. Friend outlines some of the reasons for that. The courts will deal with those responsible, and that is how it should be. Families of the victims may find solace when the guilty are sentenced, but what of those who seek no vengeance? What of those who take the view that such abuse should never have happened and want to know why it did happen? It is fair to say that we all want to know who was responsible for presiding over this human crisis. How far and how wide does culpability spread?
	We cannot erase the evidence of abuse, where and when it happened. We cannot undo the pain, the suffering and humiliating experience endured by people with learning disabilities, and we most certainly cannot leave it to the monolithic bureaucratic machine to ensure that such abuses never occur again. We have completely and unmistakably failed to protect adults in many aspects of their character where we see that their mental capacity is that of a child.
	Winterbourne View was operated by a company called Castlebeck Care Ltd, which charged the public purse an average of £3,500 per patient per week for the services that it provided. For that amount of money, a person could stay in the Ritz hotel. For that amount of money, Castlebeck Care Ltd saw a turnover of £3.7 million per year from Winterbourne View. We should know what that money was spent on. We do not know, but the Department of Health should be able to solicit this information and put it into the public domain—again, a point that the parents whom I met today made loudly and clearly. It is only then that a proper, informed judgment can be made as to whether the reason for being of those who are providing such services is the pursuit of profit or patient care.
	As I said, I met today with families who related their own experience. What they told me is that questions and challenges must be addressed to local councils and local health authorities, which have a crucial role. The Improving Health and Lives organisation published a report written by Professor Emerson of Lancaster university which analysed the Care Quality Commission’s investigations into 150 care providers. Professor Emerson established that only one in seven patients were being supported in an environment that was fully compliant with statutory regulations. He also established that units operated directly by the NHS were more likely to be compliant than those that were out to make a profit. Half the units investigated did not meet those important statutory levels of care.
	The Care Quality Commission knew exactly what was going on. Reading through the material, it is impossible not to conclude that its inaction was simply shocking. It presided over the shambolic and chaotic delivery of vital care services. It was appalling when not even lip service was paid to the adherence to statutory regulations or the basic minimum levels of care. Prior to the abuses at Winterbourne View, there were months and months when the commission carried out no inspections at all. Its self-described “light-touch regulation” is part of the reason why these abuses occurred. Winterbourne View was inspected only once every two years in the absence of any complaints. Clearly that is profoundly unacceptable. The commission was also affected by the coalition Government’s civil service recruitment freeze, which resulted in it having fewer inspectors than it clearly required.
	Inspectors must increase the pressure in care units that are underperforming. Inspections must occur more regularly and without warning. There must be stiffer penalties for care providers for non-compliance with their statutory obligations. The commission must be relentless when it comes to investigating care providers that cause concern. Of course, as we all know, Winterbourne View was closed down, but how many people know that Castlebeck Care Ltd had two other units closed down as a result of serious concerns about the level of care?
	The “Panorama” documentary not only exposed Winterbourne View; it laid bare the unbelievable ineptitude of the commission, which was utterly incapable of taking action in all three units before the scandal was exposed. In my view, the new mantra should be, “Inspections will occur anywhere at any time and without prior notice.”

Kerry McCarthy: My right hon. Friend talked about meeting the parents of the patients in the care homes. One of the concerns that have been raised with me is that of elderly parents who care for children with learning disabilities. In particular, my constituent Ivor Needs has a son who is vaccine damaged. Because Winterbourne View is in the vicinity of my constituency, they are really concerned because they have no confidence that the system will be able to look after their child when they are no longer around to do so. Does my right hon. Friend agree that we need some system in place to ensure that people such as Ivor’s son, Matthew, are looked after when their parents are no longer around to do so?

Tom Clarke: My hon. Friend makes an excellent point and, yes, she is correct. That point was raised with me today several times. Over the years I have certainly had many letters from parents who simply ask, “What will happen to our children when we are no longer here?” I am sorry to say that, on this evidence, I worry very much indeed.
	There must also be a review to ensure that the current funding system does not incentivise the keeping of patients for long periods at assessment centres. If adults with learning disabilities are better treated and cared for in their own communities, there has to be a support network. Having local care units that are integrated into local treatment centres is a better model than dispatching patients for assessment hundreds of miles away from their friends, families and communities.
	We cannot ignore the voices of the 86 leading figures and charities in the care sector who have stated that the current model poses a real risk that similar abuses will occur in future. Enhanced sentences rightly already exist for those found guilty of racism and homophobia. To begin the process of moving to local integrated units, the Government should begin closing large assessment centres and set a time scale. Local commissioners should develop local services that meet the care requirements of those with learning disabilities.
	Sadly, those issues were identified long before the scandal emerged. The late Professor Mansell’s report “Services for People with Learning Disabilities and Challenging Behaviour or Mental Health Needs” was clear in its analysis and prescribed remedy.
	The current care model, and the regulation of it, led to these abuses. It is the system that we are challenging. Simon spent 15 months at Winterbourne View and was hit, pushed, abused and tormented. When he cried for help, we collectively let him down. Then there is the experience of James, a child with a learning disability and autism who suffered abuse and neglect. When James needed help, we collectively let him down. Chrissy suffers from various conditions such as autism and epilepsy as well as from challenging behaviour. When Chrissy needed help, we collectively let her down. There is also Victoria, whose father died before she was nine
	years old. She suffered a lot of family stress. When Victoria needed care, we collectively let her down. Emmanuel, only six months out of school, was sent away to a unit far away from his family, where he remained for 18 months. All those people, and many more, have been collectively let down.
	The scandal, highlighted so bravely by Terry Bryan, is predicated on the notion that if people want to abuse someone, they will, under the present system. The status quo is no longer a tenable option. I trust that the Minister will recognise that we need Government intervention to tackle and cure the cause of abuse. We never want a repeat of Winterbourne View or any similar home in today’s or tomorrow’s Britain. We want public support for our efforts in caring for and protecting people with learning disabilities. We must never collectively let them down again.

Paul Burstow: I congratulate the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) on securing this important debate and thank him for setting out so powerfully the case for action, not just by the Government but by all those in the system. He acknowledged that the responsibility for safeguarding the vulnerable in our society sits with us all. We should all be vigilant and we must be willing to blow the whistle and to stand up and be counted.
	The Government agree with the right hon. Gentleman that, like anyone else, people with learning disabilities have the right to lead their lives free from fear, harassment, harm and abuse. People with learning disabilities should be treated with dignity and respect.
	This is the first parliamentary opportunity to refer to a sentiment shared across the House tonight. I should like to pay brief tribute to the work of Lord Morris of Manchester, Alf Morris. Opposition Members will know him from his service as a member of the Labour parliamentary party for many years. He was an undoubted, doughty challenger and campaigner for the rights of disabled people, regardless of their disability. He will be missed, having departed this world during the recess. He was the first Minister with responsibility for disabled people and the pioneer of disability legislation in this country, along with Lord Jack Ashley, who is also sadly missed. I suspect that they are both looking down on this debate and regretting the fact that we are still debating abuse of this sort. I want to put on record my tribute to both of them.

Tom Clarke: I am very respectful of what the Minister has said about two great men, Lord Ashley and Alf Morris. The last discussion I had with Alf Morris was about this very issue.
	Motion lapsed (Standing Order No. 9( 3 )).
	Motion made, and Question proposed, That this House do now adjourn.—(Mr Dunne.)

Tom Clarke: The House and the Minister will not be surprised to hear that Lord Morris’s final words to me were about the battle of haemophilia and making sure
	that those who were treated with inappropriate blood should have their rights met. I thank the Minister for his comments.

Paul Burstow: I am sure that Lord Morris would have been following these matters very closely and with great interest, and I am grateful to the right hon. Gentleman for raising them.
	The events at Winterbourne View that the right hon. Gentleman so clearly described were horrifying and depressing. They were horrifying because they so sharply defined everything that is rotten and can go wrong in closed institutions where people are out of sight. What took place at Winterbourne View was criminal. A culture of abuse was allowed to fester and grow undetected and unchecked. The serious case review by Margaret Flynn sets out in great detail the failings of Castlebeck Care Ltd, and it makes grim reading. The right hon. Gentleman reported many of its findings to the House. The events at Winterbourne View were depressing because, as the report by Mencap and the Challenging Behaviour Foundation, “Out of Sight”, reminds us, it is not the first time that closed institutions have let down people with learning disabilities. The right hon. Gentleman highlighted the personal stories that are contained in that important report, and those stories are very telling, with families feeling let down by the system and the sense that the best interests of the individual are not being served and that their views, wishes and feelings were not sought, and if they were sought were not understood.
	In October this year, the court will hand down sentences to the 11 members of staff who have pleaded guilty to maltreatment of patients at Winterbourne View hospital. There are no excuses and no mitigating circumstances. What happened was degrading, dehumanising and despicable. I understand that the Crown Prosecution Service will ask the judge to take into account the fact that these are disability hate crimes when determining the sentence of the defendants.

Julian Lewis: Can the Minister inform the House whether the people who behaved in such a sadistic way had, prior to recruitment, shown any evidence of tendencies of this sort? We would usually expect people who go into the caring professions to be empathetic, sympathetic and caring. How come people who gloried in sadism found themselves in such positions?

Paul Burstow: That goes to the heart of a number of the points made in the serious case review about the nature of the recruitment processes that were used by Castlebeck and the way in which it then carried on inadequately to train, supervise and monitor the conduct of those staff. I will come back to some of the actions that the Government are taking in that regard to make it much more difficult for that to occur again in future.
	Of course, what happened at Winterbourne View came to light only as the result of the actions of the whistleblower, Terry Bryan, and the Panorama programme broadcast by the BBC. I personally thanked Terry for his actions when I spoke to him some months ago about the interim report that we published in June, and I do so
	again tonight. Thanks to Terry, the Care Quality Commission has changed its systems and set up a dedicated whistleblowing team. An even greater emphasis is being placed on the importance attached to the role of whistleblowers. That is why the Government have introduced a free whistleblowing helpline, not only for NHS staff but, for the first time, for social care staff, so that they can get advice on how to report concerns that they have. There has also been a strengthening of the NHS constitution to make these matters clear to their employers as well.
	Terry Bryan blew the whistle on the worst excesses of a wider systemic failure. As I acknowledged in the Department of Health’s interim report in June, the problems revealed at Winterbourne View are more systemic. There has been a tendency when reporting on Winterbourne View to heap much, if not all, of the blame on the CQC. Indeed, the CQC seems to stand as the barrier to everyone else who should be in the dock being criticised, scrutinised and challenged for what went wrong. Although the CQC, rightly and properly, acknowledged its failings and apologised at the time, the issue of staffing and the freeze that this Government introduced on coming into office in May 2010 was specifically lifted for the CQC in October 2010, and there were no restrictions on staff recruitment. If there were failings of recruitment, the CQC would need to answer for them—indeed, it has—before the Health Committee.
	Every part of the system—NHS and social care commissioners, providers, regulators and health and care professionals—has a part to play and, indeed, has questions to ask itself about what has passed.

Roger Williams: The Minister rightly pays tribute to the whistleblower, but does he agree that when vulnerable people are moved away from their communities and, indeed, their families to care homes that may be many miles away, complaints are less likely to be made and, therefore, inspections less likely to be triggered?

Paul Burstow: My hon. Friend makes an important point and anticipates what I am about to say. The Department’s guidance is clear. People should be supported to live in the community, wherever possible, and only in strictly limited cases should assessment and treatment centres be used. Nowhere in policy or guidance is there justification for long-stay assessment and treatment hospitals. Indeed, the CQC found length of stay ranging from anything between six weeks and 17 years, with five to seven years not uncommon.
	The hon. Member for Slough (Fiona Mactaggart) raised the issue of data during her intervention on the right hon. Member for Coatbridge, Chryston and Bellshill. I agree that we need to improve data collection so that we have a clearer picture of what is going on. The painstaking work of the serious case review, Department of Health officials and others to create a clear picture of the system begs questions about the adequacy of data collection for many years.

Fiona Mactaggart: I wrote to the hon. Gentleman last week—although, having been a Minister, I suspect that he has not seen my letter—asking him to conduct an audit of out-of-area placements of vulnerable people
	and to publish the figures on people who are placed a long way away from home. Will he commit tonight to do that?

Paul Burstow: What I will rightly do—having been a Minister, the hon. Lady will understand this—is give her the justice of reading her letter and considering properly what she has asked. There is merit in what she has said. There is certainly merit in ensuring that those who commission such services are collecting that information so that they have a clear picture of those who are being placed out of area.
	I am more interested in the more fundamental question of the appropriateness of something that is outside of policy becoming a practice and being established as an ongoing practice. My point is that we need to look critically at the system that has allowed out-of-area placement to grow to the extent that it has, which has allowed such abuse to go unnoticed in some places for too long. There is no place for such long-stay institutions detaining vulnerable people far away from home.
	Providers, commissioners, regulators and individual professionals all have a responsibility—a duty of care to those on whose behalf they commission services. Last year, in the wake of Winterbourne View, the CQC conducted 150 inspections of other services for people with learning disabilities. It adopted new ways of working involving experts both by profession and experience. Although the CQC found no other cases of abuse like those exposed at Winterbourne View, it is disturbing that half of the services that the CQC inspected revealed evidence of poor quality care that was failing to meet essential care and safeguarding standards. Everyone who is involved across the NHS and social care has a vital part to play in driving up standards.
	As I have said, the Department’s guidance has been and remains clear. The interim report sets out clearly the elements of the model of care that we expect to see commissioned. However, that is not always happening on the ground. Those commissioning, or in too many cases, spot purchasing, long-stay assessment and treatment services need to look carefully at what they are doing. Indeed, I can tell the right hon. Member for Coatbridge, Chryston and Bellshill that the chief executive of the NHS Commissioning Board and the Department’s director-general of social care wrote to chief executives and chairs of all NHS bodies and local authorities to highlight the interim report and reinforce their responsibility to improve commissioning.
	When I published the interim report in June, I set out five objectives for improving services for people with learning disabilities and behaviour that challenges. Those objectives underpin the 14 national actions set out in the report to improve care and support for people with learning disabilities or autism and behaviours that challenge. Those actions include promoting open access for families and visitors and ensuring that people are involved in reviewing the care that they receive; encouraging the CQC to carry out unannounced inspections at any time of the day and week; working with the CQC and the Department for Education to promote best practice and positive behavioural support and ensure that physical restraint is only ever a last resort, and certainly not a tool of choice as it clearly was at Winterbourne View; improving integration between the NHS and social care by setting up health and wellbeing boards to agree joined-up ways of improving services; and getting a
	range of national organisations, including the Association of Directors of Adult Social Services, the Royal College of General Practitioners and other royal colleges, the NHS Confederation and the NHS Commissioning Board, to sign up to a concordant setting out the actions that each will be committed to taking forward to deliver the right care for people with learning disabilities and challenging behaviour.
	One final action that I commend to the House is our work with the NHS Commissioning Board to improve the use of NHS contracts. When we read the serious case review, it is shocking to see how few NHS organisations used NHS contracts to contract their services. They used Castlebeck’s own contract, which was a poor document. The serious case review is just part of what we need to examine. There is also the NHS review of commissioning that was conducted by the South West strategic health authority, which sets out a number of other actions that are being taken to address failings.
	I made it clear when we published the interim report that I would very much welcome feedback on it to ensure that the final report, and the action plan that we will publish alongside it, would be as robust as possible and deliver what Members of all parties wanted. I therefore welcome the report by Mencap and the Challenging Behaviour Foundation. As part of our response, we will consider the role of commissioners and how we can support them in the new health and care system.
	In addition to the work that my Department is doing directly in response to Winterbourne View, we are taking a number of other steps to improve the care and support system. For example, we are introducing the first ever code of conduct and national minimum training standards for health care and adult social care support workers. That goes to a point that was made in interventions. That work is being taken forward by Skills for Care and Skills for Health and will ensure, for the first time, that employers and people who provide care understand their responsibilities and roles in delivering high-quality and acceptable care to people who need it.
	In July, when we published the White Paper on care and support, we set out plans for measures to increase the availability of appropriately skilled care workers, including by expanding the number of care apprenticeships. The White Paper also made the case for strengthening safeguarding, which is what this debate is fundamentally all about. That is a key priority for the Government.
	We are committed to preventing, and reducing the risk of, significant harm to adults in vulnerable situations, while supporting individuals to maintain control over their own lives and to make informed choices without coercion. That is why the draft Care and Support Bill sets out a new statutory framework for adult safeguarding to address some of the defects that have been identified, and key responsibilities for local authorities and their partners in the NHS and the police. It will ensure that safeguarding adults boards exist everywhere in England. The Bill will place all that on a statutory footing for the first time.
	I am grateful to the right hon. Member for Coatbridge, Chryston and Bellshill for securing the debate. In learning the lessons from Winterbourne View, I am determined to ensure that the voices of people with learning disabilities and of families are right at the heart of what we do.
	The National Forum of People with Learning Disabilities and the National Valuing Families Forum sit on the programme board that I chair, which will oversee progress on the action plan. Both have key roles to play locally and nationally in driving change.
	Let me end by making it clear that the Government’s approach to people with learning disabilities is grounded in fundamental principles of human rights, independence, inclusion and choice. There can be no excuses. There is no tolerance of those who abuse disabled people.
	The right hon. Gentleman has done the House a service by bringing these matters to it tonight. I look forward to coming back to the House later this year with the final report setting out the actions that the Government will take to stamp out abuse.
	Question put and agreed to.
	House adjourned.